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China misusing WTO, says US

The US plans to bring a case to the WTO arguing that China is favoring domestic companies for licensing. China has been a big target for cases brought by the US, Japan and the EU, and the US hopes to sign up allies for its planned WTO action.

The EU wants to change WTO rules to permit swifter action against dumping and subsidies. The WTO was founded in 1995 as successor to the General Agreement on Tariffs and Trade, forged in 1948. In 2001, the year China joined, members launched talks to update and rewrite global trade rules but those efforts died a decade ago.

Since then, members have cut side deals to open markets. The EU, a vocal champion of free trade and the WTO, has struck or is seeking deals to liberalize trade with Canada, Japan, Mexico, Australia and Singapore. Such bilateral deals are allowed under WTO rules if they are deemed complementary to the multilateral trading system, cover substantially all trade and facilitate the freer commercial flows without raising barriers to non-parties.

US allies say a bigger problem for WTO is that China has taken advantage of the body’s rules to promote itself at the expense of other members. The Geneva-based body was designed before the rise of Chinese state-backed capitalism.