The European-American Business Council today applauded the European Commission announcement that it would join in the case brought by the US against China's discriminatory tax rebate policy for semiconductors.
Japan has also announced that it would seek an end to the discriminatory practice by China.
China levies a 17% VAT on manufactured goods such as semiconductors. However, to encourage local semiconductor production, China rebates most of the VAT payments for domestic producers while continuing to charge the full VAT on imported products. This policy constitutes trade discrimination against imported products inconsistent with China's WTO "national treatment" obligations. On March 18, U.S. Trade Representative Robert Zoellick requested formal consultations with China under the World Trade Organization's (WTO) Dispute Settlement procedures. Today, the EU Commission announced that it had requested participation in that case as an interested third party.