US, EU and Canada file trade case against China on auto parts

Friday, September 15th 2006, 9:16 am

By: News On 6

WASHINGTON (AP) _ The United States joined with the European Union and Canada on Friday charging that China has erected illegal barriers to the sale of U.S. and other foreign-made auto parts there.

U.S. Trade Representative Susan Schwab said that the United States and its allies had tried to resolve the dispute through negotiations with China but had been unable to do so. Thus, they turned to the World Trade Organization with their complaint.

``China's current stance leaves us no choice but to file a trade case,'' Schwab told reporters during a conference call.

The case, which was filed at the WTO's Geneva headquarters, marks the first time that the United States has been able to convince other countries to join in challenging China's trade practices.

The action comes less than a week before Treasury Secretary Henry Paulson will meet with Chinese officials in Beijing to press them on a range of trade issues, from China's currency policies to the need for China to open up its banking sector by allowing the operation of U.S. and other foreign banks.

The administration is under increasing pressure in Congress to do something about America's soaring trade deficit with China, which is running well above last year's all-time high of $202 billion.

Democrats hope to make America's huge trade deficits an issue in the upcoming congressional elections in which they are trying to wrest control of the House and Senate from Republicans.

The auto parts dispute involves taxes that China imposes on auto parts made in the United States and other foreign countries as a way to encourage automakers operating in China to use more Chinese-made parts.

The WTO complaint filed by the United States and the other countries alleges that this ``local content'' requirement is in violation of WTO rules.