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Cablegate: China Requests Consultations Regarding U.S.

VZCZCXRO1332
OO RUEHCN RUEHGH RUEHVC
DE RUEHBJ #6005 2561110
ZNR UUUUU ZZH
O 131110Z SEP 07 ZDK
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1785
RUCPDOC/USDOC WASHDC IMMEDIATE
INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 1952
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY

UNCLAS BEIJING 006005

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/CM SECOR AND YAMAMOTO
STATE FOR EB/TPP/BTA TSAEGER AND ESAGURTON
TREASURY FOR OASIA/ISA/DOHNER AND HAARSAGER
USTR FOR CHINA OFFICE
COMMERCE FOR ITA/ITA DAVID SPOONER, ITA/IA MICHAEL ROLLIN
COMMERCE FOR ITA/MAC MACQUEEN
NSC FOR TONG
DEPT PASS USITC LYNN LEVINE
GENEVA FOR USTR

E.O. 12958: N/A
TAGS: ECON ETRD CH
SUBJECT: CHINA REQUESTS CONSULTATIONS REGARDING U.S.
COUNTERVAILING DUTY CASE ON COATED FREE SHEET PAPER


1. (SBU) On September 13, 2007, Ministry of Commerce (MOFCOM)
American and Oceanian Affairs Deputy Director General (DDG)
Wang Hongbo summoned Embassy Deputy Senior Commercial Officer
and USTR Senior Trade Representative to inform them that the
Chinese Government will file a request for consultations with
the United States in the WTO on September 14 regarding the
United States countervailing duty case on coated free sheet
paper.

2. (SBU) DDG Wang said that the Chinese Government deeply
regrets the decision of the United States to initiate
countervailing duty cases on China, a non-market economy.
Wang noted that the Chinese Government considers it unfair
and against WTO rules to apply double investigations on
non-market economies: i.e., the United States should not
conduct both countervailing duty and antidumping cases on the
same product from a non-market economy. Wang noted that in
March 2007 the United States applied "unjustified"
provisional countervailing duties on imports of coated free
sheet paper and since then had initiated additional
countervailing duty cases. Despite repeated discussions
between the two governments on this issue, including
discussions led by MOFCOM Minister Bo Xilai, the United
States had continued these countervailing duty
investigations, Wang said.

3. (SBU) The DDG explained that on September 14 the Chinese
Government will file a request for consultations with the
United States in the WTO Dispute Settlement Body regarding
the countervailing duty investigation on coated free sheet
paper. Wang noted that although the Chinese Government
considers the relationship between the two countries to be of
great importance, the Chinese Government, given the
"unjustified actions" of the United States in this matter,
has determined that it must exercise its WTO rights.

4. (SBU) In closing, Wang noted that the Chinese Mission to
the WTO will file the request and inform the U.S. Mission in
Geneva tomorrow, and that the Chinese Embassy in Washington,
D.C. will contact its United States Government counterparts
tomorrow as well. Wang said that the Chinese Government
hopes that a satisfactory conclusion might be reached within
the WTO framework.
Randt

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