Chicken and Tires. Tit for Tat at the WTO.

Summary: Post explains why China sourcing professions need to care about Chicken, Tires and WTO rulings.

First some good news

As China is now a full member of the World Trade Organization (WTO) trade disputes are mediated by the WTO. This is a large step towards “rule of law” at a global level and helps to reduce not only trade barriers but also prevents trade friction turning into trade wars.

Now the reality

When one nation brings a case to the WTO court, it is not uncommon for the defending party to raise countersuits on other products. Sometimes the act of raising a countersuit results in the two sides settling out of court.  In cases that do go to the WTO mediation, it is very common for the losing nation to strike back in other product categories.

Case in point

WTO recently ruled in the favor of US that US tire manufacturers were being harmed by Chinese tire makers acting in an unfair manner.  As expected, the Chinese counted by claiming US Chicken products being sent to China have unfair support from US Government.  Chicken and Tires have next to nothing in common, other than being the random industries caught in a global came of tit for tat.

What’s the point? If it happened to me, it could happen to you.

The point of my article isn’t to dive into who is right and who is wrong in these particular cases.  My point is to remind international buyer that they would be wise to keep an eye out in the media for products caught in the friction between WTO members because if you deal with products that are in play at the WTO, you need to pay close attention as a WTO ruling can alter the global playing field in a big way on short notice.  For example, if you were an American distributor of Chinese tires, your profit margins just disappeared overnight.

How to stay “in the know”

To help readers keep a pulse on potential and active WTO cases, sign up for my RSS feed as I will blog about any cases that have the potential to impact the China sourcing profession.

Wishing you successful China Sourcing!

Best Regards,

Mike Bellamy

China Operations Director, PassageMaker Sourcing Solutions (3rd party assembly & inspection to protect intellectual property and ensure quality.)

Chairman of the Advisory Board, China Sourcing Information Center

Author, The Essential Reference Guide to China Sourcing

LinkedIn Profile: http://www.linkedin.com/pub/michael-bellamy-author-business-owner-volunteer-advisor/8/52a/389

1 Comment

  1. […] For a case study, check out the blog post Chicken and Tires. Tit for Tat at the WTO. […]



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