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Autos

car industryThe automotive industry is a vital sector of global trade. In recent years, automotive products have accounted for ten percent of global merchandise trade.

The Asia Pacific Economic Cooperation (APEC) Automotive Dialogue (AD) serves as a forum for APEC member economy officials and senior industry representatives to work together to map out strategies for increasing the integration and development of the automotive sector within the region.

The goals of the AD are to engage participants in cooperative efforts to foster the growth and development of the regional auto industry and to provide recommendations for action to APEC Trade Ministers.

The AD was also established in recognition of the crosscutting nature of the automotive industry and the broad benefits to many economies of trade liberalization and facilitation in this sector.

AD participants discuss the current status of the automotive sector in the Asia-Pacific region, identify barriers to growth, and develop effective cooperation mechanisms for APEC economies to address and reduce these impediments. The AD first met in 1999 in Indonesia and has continued to meet every year since then.

APEC public-private sector dialogues are seen as a way of improving mutual understanding, aiding policy development and enhancing the competitiveness of the sectors concerned.

APEC Member economies that have participated in the AD include: Australia, Canada, China, Indonesia, Japan, Korea, Malaysia, Mexico, the Philippines, Chinese Taipei, Thailand, Viet Nam and the United States.

Enforcement

China - Measures Affecting Imports of Automobile Parts (DS340)

In May 2004, China issued a new automobile industrial policy. The Policy on Development of the Automotive Industry, included provisions discouraging the importation of automotive parts and encouraging the use of domestic technology in new vehicles assembled in China.

In 2005, China issued regulations implementing the new automobile industrial policy.  One measure that generated strong criticism from the United States, the European Union, Japan, and Canada was the Administrative Rules on Importation of Automobile Parts Characterized as Complete Vehicles, which was issued in February 2005 and became effective in April 2005.  These rules impose charges that unfairly discriminate against imported automotive parts and that discourage automobile manufacturers in China from using imported automotive parts in the assembly of vehicles.

In March and April 2006, the United States, the EU, and Canada initiated dispute settlement proceedings against China at the World Trade Organization (WTO).

In March 2008, a WTO panel ruled in favor of the United States and the other complaining parties, finding that China's rules discriminate against imported auto parts and are inconsistent with several WTO provisions, including Article III of the General Agreement on Tariffs and Trade 1994.  China appealed the panel's decision to the WTO's Appellate Body, and in December 2008 the Appellate Body upheld the panel's finding that the measures are inconsistent with China's WTO obligations.

In January 2009, China stated that it would comply with the recommendations and rulings of the WTO.

Related topics:

Non-Tariff Barriers
Enforcement

Related documents:

USTR Press Release on WTO Dispute on China Auto Parts (07/18/2008)
WTO DS340 Panel Report (07/18/2008)
WTO DS340 Appellate Body Report (12/15/2008)