WTO Establishes Dispute Panel in China-US IRA Dispute
The World Trade Organization Dispute Settlement Body on Sept. 23 agreed to establish a dispute panel in China's challenge of certain U.S. tax credits for electric vehicles under the Inflation Reduction Act. Ahead of the Sept. 23 meeting of the DSB, China submitted a second request for a dispute settlement panel to assess whether the tax credits violate WTO rules.
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The U.S. in July countered the first request for a dispute panel, saying its credits are needed to tackle climate change. China said the subsidies favor U.S. goods over imports, violating anti-discrimination commitments at the trade body. The U.S. said it's disappointed over China's move to establish a panel and said that the IRA is needed to secure sustainable supply chains.
The WTO said Argentina, Australia, Brazil, Canada, Colombia, the EU, Indonesia, Israel, Japan, South Korea, Norway, Russia, Singapore, Switzerland, Thailand, Turkey, the U.K. and Venezuela reserved their right to take part in the proceedings.
Also at the DSB meeting, the U.S. raised the matter of the panel ruling for the 12th time against its origin marking requirements for goods from Hong Kong. The U.S. said the measure was needed for national security reasons. Hong Kong criticized the U.S. for raising the item at the DSB, citing prior panel decisions rejecting the U.S. claim that national security defenses of trade restrictions are self-judging.
The matter remains in limbo due to the U.S. move to block appointments to the Appellate Body. China said a "restored appeal mechanism is the proper place to address claims of panel error."
During the meeting, the U.S. submitted status reports regarding the implementation of recommendations from disputes on U.S. antidumping duties on hot-rolled steel products from Japan, Section 110(5) of the U.S. Copyright Act, AD/CVD on large residential washers from South Korea, and methodologies used in AD proceedings involving China. The EU gave a status report on EU measures affecting the approval and marketing of biotech products, while Indonesia gave status reports in two spats on its measures on horticultural products, animals and animal products.