MOFCOM Comments on WTO DSB’s Ruling on U.S. Safeguard Measures against Tire Imports from China
Wednesday,December 15,2010 Posted: 11:56 BJT(0356 GMT)  MOFCOM

The WTO Dispute Settlement Body (DSB) delivered, on December 13, the Panel report on U.S. safeguard measures against tire imports from China (DS399) to WTO member countries, and the Panel ruling is that US safeguard measures were not in violation of WTO rules. Head of the Department of Treaty and Law of MOFCOM expressed disappointments about such ruling and pointed out that China was deeply concerned about the negative effects of the Panel ruling and would carefully study the panel's report and lodge an appeal at an appropriate time in order to protect the lawful rights and interests of China’s industries.

The Head also said, the U.S. safeguard measures adopted against Chinese tires are trade protectionism intended to shift domestic political pressure. They are not in line with the WTO rules and have been widely criticized. It is proved that the safeguard measures neither in line with interests of China nor bringing benefits to the United States.

Since the implementation of its safeguard measures, the employment rate of the U.S. tire industry did not rise but fell. According to data of U.S. Bureau of Labor Statistics, the overall employment of its domestic tire manufacturing industry in the first 5 months of 2010 decreased 10% year on year. Moreover, the action caused the reduction of jobs in the U.S. domestic tire circulation; as a result, some small and medium-sized tire wholesalers closed their business.

The safeguard measures have increased the financial burden of the U.S. low-income consumers. According to data from U.S. organizations, price of U.S. tires was up 10% to 20% in average. This is due to some other factors like rubber, but the major factor is increased collection of custom duty on imports of Chinese tires.

Despite the special safeguard measures against China, the U.S. import volume of the same tire has already surpassed that before the implementation. In the first half of 2010, the U.S. import volume of tires with the same types of Chinese tires increased by 21% and the import value increased by 30%. Obviously, the U.S. special safeguard measures caused the sharp reduction of tire imports from China and the increase of such imports from other countries.