China and US trade barbs at WTO amid reform calls

Geneva

THE United States said on Monday that China's "unfair competitive practices" were harming foreign companies and workers in a way that violates World Trade Organization (WTO) rules, but vowed to lead reform efforts.

US trade ambassador Dennis Shea drew fire from Chinese envoy Zhang Xiangchen who said the Trump administration's tariffs on steel and aluminium products allowed protectionism under the guise of dubious national security concerns.

The heated words, in texts seen by Reuters, were exchanged at the start of a closed-door review of US trade policies, held every two years at the WTO, which continues on Wednesday.

Mr Shea expressed concern about the WTO dispute settlement system having "strayed far from the system agreed to by members" and said that the Appellate Body had overreached in some legal interpretations.

Mr Zhang countered that by blocking the selection of judges, Washington was putting the system into paralysis.

To force reform at the WTO, President Donald Trump's team has refused to allow new appointments to the Appellate Body, the world's top trade court, a process which requires consensus among member states. As a result, the court is running out of judges, and will be unable to issue binding rulings in disputes.

Mr Shea described the US economy as "one of the most open and competitive economies in the world", with among the lowest tariffs globally, rejecting criticism by some of the US approach as "unilateralist and protectionist".

China has pursued "non-market industrial policies and other unfair competitive practices" aimed at supporting its domestic industries while restricting or discriminating against foreign companies and their goods and services, he said.

"The WTO is not well equipped to handle the fundamental challenge posed by China, which continues to embrace a state-led, mercantilist approach to the economy and trade," Mr Shea said.

He said the US was committed to working with like-minded members to address concerns on the functioning of the WTO. REUTERS