EU – WTO complaint over Chinese media restrictions

   GENEVA, March 4, 2008  – The European Union and United States said
Monday they had filed complaints at the World Trade Organisation over Chinese
restrictions on foreign financial news providers working in the country.
   The dispute has been brewing since September 2006 when China renewed the
monopoly held by state news agency Xinhua, which prevents foreign providers of
financial information services from dealing directly with Chinese clients.
   China been criticised by Canada, the EU, Japan and the United States for
its restrictions on foreign financial news agencies such as Bloomberg and
Reuters.
   "Competitive and open financial services information markets are the
lifeblood of a strong financial sector, but China’s rules have tipped the
balance against foreign companies," EU Trade Commissioner Peter Mandelson said
in a statement.
   The US also said it believed the Chinese policy to be in breach of WTO
rules.
   "China’s restrictive treatment of outside suppliers of financial
information services places US and other foreign suppliers at a serious
competitive disadvantage," US Trade Representative Susan Schwab said in a
statement.
   The lodging of the complaints is the first step in the WTO’s dispute
settlement process which can sometimes drag on for months if not years.
     The dispute comes amid growing tensions between China and Western
economies.
   Last month, China suffered its first ever defeat at the WTO over a US
complaint on car-part tariffs, and analysts expect many more disputes to
follow.
   The case on auto parts was among a growing line of complaints at the World
Trade Organisation targeting China, and the victory by the US could embolden
nations to take a tougher action against the trading behemoth, some experts
say.
   "The US could become more aggressive," said Andy Xie, an independent
economist based in Shanghai. "I think Europe, now with two-way trade in favour
of China, could also be more aggressive."
   China, which joined the WTO in 2001, has increasingly become the focus of
WTO complaints after keeping a relatively low profile in its first few years
in the organisation.
   The tremendous growth of its exports has provoked the ire of its major
trade partners who accuse China of being a major beneficiary of the global
trading system, but failing to abide by its rules.
     As the EU and US have filed separate complaints, they will both have two
months to attempt to reach a negotiated settlement with the Chinese.
   Failing that, they can request a panel of the WTO’s Dispute Settlement Body
to examine the case.
   It is possible that, at this stage, the two separate complaints would be
heard by the same panel, sources said.
   Mandelson said the Chinese rules on financial news "pose a serious obstacle
to the business of EU financial information suppliers, which in turn impedes
the smooth functioning and transparency of China’s financial markets."
   "I trust the EU and China will be able to resolve this issue amicably and
to mutual benefit," Mandelson added.
   Schwab said it was "not in China’s interests to restrict access to the
high-quality, comprehensive financial information provided by foreign service
suppliers."
   "We hope the filing of our request for formal WTO consultations will lead
to a swift resolution of this matter," she added.

AFP