China violated the national treatment principle

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Unformatted text preview: ame as domestically produced ones after they are imported 2. I would source more from Chinese suppliers to make sure my cars contain more than 60% local parts To deter shipping of unassembled cars to obtain the lower tariff rate 1. If the WTO ruling holds, which WTO principle did China violate? 2. From GM’s perspective, how does this affect sourcing decisions? (i.e., who you buy your parts from) 3. If you are a GM (with rising sales in China) supplier in Michigan, what do you do in the face of these tariffs? 3/9/2014 Page: 13 3. I would set up production in China to make sure I am not at a disadvantage compared with local suppliers GUY SHANI , 2014 - STRATEGY 310 - THE WORLD ECONOMY - SESSION 10 1. Why the WTO and how it works Exceptions to the three principles 1. Temporary relief To safeguard against import 2. Countervailing duties Against dumping and unfair pricing competition 3. Preferential trade agreement Provisions for multilateral, bilateral and regional agreements 3/9/2014 Page: 14 e.g., punitive tariffs on Chinese steel pipes (or solar panels) e.g., NAFTA, CAFTA, EU… GUY SHANI , 2014 - STRATEGY 310 - THE WORLD ECONOMY - SESSION 10 7 Agenda 1. Why the WTO and how it works 2. Dispute resolution and the Doha round 3. WTO, regional, business and trade agreements 3/9/2014 Page: 15 GUY SHANI , 2014 - STRATEGY 310 - THE WORLD ECONOMY - SESSION 10 2. Dispute resolution and the Doha round How does dispute resolution work? 1. What is the process for getting redress if you are a victim of unfair trade? 2. What are the penalties? There are less than 40 launched per year 3. Why are there so few disputes when there is so much international trade? Is it because unfair trade is rare? 3/9/2014 Page: 16 GUY SHANI , 2014 - STRATEGY 310 - THE WORLD ECONOMY - SESSION 10 8 2. Dispute resolution and the Doha round Dispute settlement mechanism WTO Dispute Settlement Body Consultations with plaintiff and defendant Successful Fail Plaintiff lodges complaint Dispute Panel Report and recommendations Complies Loser has 15 months to comply Appeal Panel Does not comply Winner can impose penalties on any of loser’s exports 3/9/2014 Page: 17 GUY SHANI , 2014 - STRATEGY 310 - THE WORLD ECONOMY - SESSION 10 2. Dispute resolution and the Doha round Venezuela vs. US dispute 3/9/2014 Page: 18 GUY SHANI , 2014 - STRATEGY 310 - THE WORLD ECONOMY - SES...
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This note was uploaded on 04/02/2014 for the course STRATEGY 310 taught by Professor Staff during the Winter '08 term at University of Michigan.

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