WTO News
- U.S., Mexico WTO complaint criticized
Date: 5-Sep-2007 Sources: (Shenzhen Daily)
CHINA criticized the United States and Mexico yesterday for asking the World Trade Organization (WTO) to set up a panel to settle a dispute over Chinese subsidies for a range of industries.
The WTO opened a formal investigation Friday into allegations by the United States and Mexico that China is providing WTO-prohibited tax breaks to encourage Chinese companies to boost exports, while imposing tax and tariff penalties to limit purchases of foreign products in China.
'The United States and Mexico have largely misunderstood relevant policies and ignored the progress and situation of China's economic system reform,'an unnamed official at China's Ministry of Commerce said in a statement posted on the ministry's Web site.
'With the launch of the corporate income tax law, which is about to be implemented, China's policy and measures are now fully in line with WTO rules,'the official said.
In March, China's legislature passed a corporate income tax law, effective Jan. 1, 2008, that imposes a uniform 25 percent tax rate on foreign and domestic companies, ending a system under which foreign companies typically paid lower rates of tax. The law allows tax cuts on certain high-technology companies as part of measures to support domestic industries.
The United States filed the complaint with the WTO in February. Mexico joined the dispute in March. The WTO could take months, and possibly years, to reach a final ruling that could open the door to retaliatory sanctions.
The Chinese official said the United States and Mexico's request for a WTO panel is based on their domestic political needs.
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