BEIJING - China is planning to lodge an appeal with the World Trade Organization (WTO) in June against the anti-dumping duties imposed by the United States on coated paper imports, a source familiar with the matter told China Daily on Monday.

The appeal would be the fifth such instance of China seeking relief against the US at the court of the international trade arbitrator after the recent tire dispute.

The source said China is concerned that the US has rejected its application to recognize the coated paper industry is highly market-oriented, the first such application made in the past six years.

China, however, remains confident that the WTO will consider the appeal fairly and the US would eventually acknowledge the coated paper sector is a market-oriented industry, the source said. This will be important for China to finally get US recognition of the nation's market economy status (MES).

MES status would help the nation have greater say in its trade disputes with the US in the long run.

Imports from China to the US and EU are often subject to anti-dumping or anti-subsidy duties. This is particularly so as, for the sake of comparison, the developed nations often chose a country which has higher labor costs and then come to the conclusion that Chinese imports are unfairly subsidized or priced lower than market level, said sources.

China's decision to seek WTO arbitration also assumes importance against the recent backdrop of calls for a currency revaluation and escalated trade friction with the US.

On April 29, the US Commerce Department said it was imposing preliminary anti-dumping duties of up to 136 percent on coated paper imports from China.

"The US measure is pure trade protectionism. It is against the WTO rules and relies on incorrect evaluation methodology and uses double standards for investigation. It is also an action that may see opposition from industry associations and government organizations," said Scott Liu, founder and attorney-at-law with Scott Liu & Associates, the attorneys responsible for dealing with the coated paper case.

Scott Liu & Associates is also a law firm whose business has been mainly focused on trade remedy cases between China and the US.

The Commerce Department is expected to release its final determination on the coated paper in September, and China will make the appeal to the WTO in June.

"China and the US will have three months to negotiate with each other before the punitive measures are imposed. If the US still insists on keeping the preliminary duties, the WTO should have some kind of remedial measures ," said Liu.

In its appeal to the WTO, China said the US violated relevant rules as it declined to accept that the Chinese coated paper industry is market-oriented. China will try to persuade the US to agree on the status.

From 2001 to 2004, China made similar applications for color televisions and furniture, but failed.

In 2008, over 20 percent of the coated paper manufactured in China was exported. Of this nearly 200,000 tons of coated paper worth $228 million was shipped to the US. "The duties, if imposed would be a death blow to China's coated paper exports," said Liu.

Chinese leaders have held consultations on MES with the US at several meetings for some time now. "It is no use pleading and waiting for a nod. We must resort to possible ways that could force them to do so at a gradual pace", said Liu.

China Daily

(China Daily 05/11/2010 page13)