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WTO sets up dispute panel to review certain tax credits under US act

24 Sep '24
2 min read
WTO sets up dispute panel to review certain tax credits under US act
Pic: Adobe Stock

Insights

  • The WTO dispute settlement body agreed to set up a panel to find out whether certain tax credits under the US Inflation Reduction Act are in line with WTO rules after a second request by China for setting up such a panel.
  • China said IRA subsidies favour US goods over imports, violating WTO rules prohibiting such discrimination.
  • The US said IRA is its most significant step towards clean energy.
The World Trade Organisation’s (WTO) dispute settlement body (DSB) recently agreed to set up a panel to determine whether certain tax credits under the US Inflation Reduction Act (IRA) are in line with WTO rules following a second request submitted by China for establishing such a panel.

The United States said it was not in a position to agree to China's first request in July, justifying its actions as necessary to combat climate change.

China said IRA subsidies favour US goods over imports, violating WTO rules prohibiting such discrimination, a WTO release said.

The United States expressed disappointment over China's decision to pursue a panel request and reiterated that IRA is its most significant step towards clean energy, aimed at ensuring secure and sustainable supply chains for a global clean energy future.

Argentina, Australia, Brazil, Canada, Colombia, the European Union, Indonesia, Israel, Japan, Korea, Norway, the Russian Federation, Singapore, Switzerland, Thailand, Turkiye, the United Kingdom and Venezuela reserved their third party rights to participate in the panel proceedings.

For the 12th time, the United States raised the matter of the panel ruling in DS597 at a DSB meeting. This DS597 dispute concerns a requirement in US law that imported goods produced in Hong Kong be marked to indicate that their origin is China.

The United States said it was raising the matter again as a result of recent developments in Hong Kong regarding free speech and human rights. It referred back to its previous statements regarding its position on essential security and its reasons for placing this item on the DSB agenda.

Hong Kong criticised the United States for once again raising this matter at the DSB. It referred to previous WTO panels that dismissed US claims that invoking national security in defense of a trade-restrictive measure is entirely self-judging. 

Any objections should be heard by the WTO's Appellate Body, which remains blocked due to the US refusal to allow appointment of new Appellate Body members, said Hong Kong.

Speaking on behalf of 130 members, Colombia introduced for the 79th time the group's proposal to start the selection processes for filling vacancies on the WTO Appellate Body.

The United States repeated that it does not support the proposed decision to commence the appointment of Appellate Body members as its longstanding concerns with WTO dispute settlement remain unaddressed.

Fibre2Fashion News Desk (DS)

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