China has agreed to hold consultations with the United States and the
European Union (EU) over import tariffs on auto spare parts, according to the
Ministry of Commerce.
The US and the EU jointly filed a complaint on March 30 with the World Trade
Organization (WTO), accusing China of violating its commitment to the WTO by
imposing a discriminatory tariff regime on foreign car parts.
Sun Zhenyu, China's commissioner to the World Trade Organization, has
informed his US and EU counterparts that Beijing has accepted their request to
participate in consultations, the ministry said in a statement published on its
website on Saturday.
"The time and place still have to be decided," the statement said.
The US and EU response was not available last night.
China is scheduled to lower tariffs on whole vehicles and spare parts to
around 25 per cent and 10 per cent respectively by July this year in line with
its commitments to the WTO.
However, according to a regulation on the imports of vehicles implemented
since last April, China applies tariffs for "whole vehicles" on the import of
spare parts making up 60 per cent or more of the value of a vehicle.
Major US and EU automakers said the regulation hinders their access to China,
one of the world's largest and fast-growing auto markets.
The United States and the EU claimed, in the joint complaint with the WTO,
that China's rules contravene its WTO obligations not to impose obligatory
"local content" rules because to avoid the "whole car" tariff rates, a car-maker
has to source at least 40 per cent spare parts by value in China.
According to the WTO regulations, the two sides shall start consultations
within 30 days.
In case an agreement is not reached in the next 60 days, the EU and the US
have the option of requesting a WTO panel to hear and rule on the dispute. Such
WTO disputes usually take two to three years to resolve.