A lot of people have been wondering how China will implement adverse WTO rulings. Well, here's an indication from the China - Auto Parts (DS339,340,342) dispute:
China is expected to next week scrap higher tariffs on imported auto parts after World Trade Organization last year ruled that they were unfair, state media said Friday.
The move would put an end to the four-year-old regulations that increase the levy on the imports if they make up too large a share of the finished home-made automobiles.
The commerce ministry and other government agencies will issue a joint statement Tuesday abolishing the rule, the Shanghai Securities News reported, citing unnamed sources with the China Association of Automobile Manufactures
Sometimes it is not immediately clear whether proposed implementation actually complies with a ruling, but "scrapping" the tariffs and "abolishing the rule" sure sounds like it would constitute compliance.
The point of the tariffs/charges (allegedly) on imported parts was to encourage Chinese car-makers to use more local content. The WSJ notes that this has been happening anyway, which perhaps explains why China was so willing to implement:
"There's only a very small percentage of car makers who have not reached the 40% local content," said Gerwin Ho, an analyst at Citi. "That's why Beijing is not so hung up on this."
Local content in China-produced Daimler AG's Mercedes-Benz C-Class sedans will reach 40% next month, while local content for the extended E-Class will also reach 40% when the vehicle is launched in mid-2010, Northeast Asia Chairman and Chief Executive Ulrich Walker said recently.
