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The World Trade Organisation has upheld the stiff duties that President Obama imposed on car tyres imported from China last year, an important victory released on the eve of trade talks between the two countries, according to the Washington Post. 

A panel at the Geneva-based trade group on Monday said it agreed that the US was justified in slapping a 35% tax on Chinese tyres under WTO provisions that let countries protect local industries and workers from sharp increases in Chinese imports. 

The provision was part of the agreement under which China joined the WTO a decade ago. Chinese tyre imports to the United States tripled between 2004 and 2008, to 46 million tyres worth an estimated USD$1.7 billion. 

The administration imposed a three-year levy on the Chinese products in September 2009 on union complaints about lost jobs at US tyre manufacturers. 

China’s ministry of commerce, in a statement released on its Web site Tuesday, called the US measure “protectionist” and said that China would appeal the ruling. 

China had formally protested the US action, arguing that it violated WTO rules. But in a 128-page ruling that delved deeply into the economics of the tyre market, the WTO panel found that the administration had presented information “sufficient to support . . . its conclusion that subject imports from China were a ‘significant cause’ of material injury” to US tyremakers. 

Unlike many duties or fees imposed in trade cases, the United States did not have to show that China was competing unfairly or underpricing its products – only that the rapid increase in imports had hurt the domestic industry. The three years of levies are meant to give the US industry time to adjust to the import competition. 

The case marks the first time the worker-protection provision has been used. US Trade Representative Ron Kirk called it a “major victory” for US efforts to more rigorously enforce trade agreements. More at Washington Post

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