Barack Obama’s US government has filed a new trade case against China at the World Trade Organization (WTO). In it the US government charges China with unfairly subsidizing exports of cars and auto parts with Obama seemingly looking to get a leg up in the state of Ohio ahead of the election in November. The way Mitt Romney is going we’re not sure he’ll need it though.
Obama, speaking at a rally, said: “These are subsidies that directly harm working men and women on the assembly lines in Ohio and Michigan and across the Midwest. It’s not right; it’s against the rules, and we will not let it stand.”
Obama talking about rules got us thinking and realized this WTO he talks of must be the same one that we hear about when talk turns to Antigua. The same one that usually puts the USA in the position China is currently in and Antigua plays the position of the one crying for the “right” thing to happen.
As a recap, Antigua first went to the WTO way back in 2005 to complain about the US. The land of the free had told firms that were licensed in the Caribbean island that offering services to US punters was forbidden. Antigua argued this contravened international trade law and the WTO agreed, in the process telling the WTO to shut down domestic horse betting operations or allow Antigua the same access. The US chose the invisible option (i.e. none of the two mentioned) and in 2007 the WTO ruled that the US owed Antigua $21million. If the US refused to pay, which it so far hasn’t, the WTO told Antigua it could collect the money using other means. That option hasn’t been exercised by Antigua yet but CalvinAyre.com reported last month that they are close to exercising the option.
The US going to the WTO about China smacks of a very similar situation unfolding and the US quite obviously don’t like being dictated to by the bigger boys. We’re still waiting to see if Antigua does decide to go ‘thermonuclear’ on the US and if the US gives way then it could have quite an effect on the Department of Justice suits against US firms. As we’ve said many times before, stay tuned…