- The Washington Times - Saturday, August 29, 2009

SHANGHAI (AP) | China said Friday it has revised its tariffs on imported auto parts after losing an appeal against a World Trade Organization ruling that said it was breaking international trade rules.

Effective Tuesday, all imported auto parts will be taxed at the same rate regardless of the percentage of foreign-made parts used to make a vehicle, according to a notice posted on the Web site of the National Development and Reform Commission.

The notice gave no details or reason for the change.

However, Beijing was required to amend its regulations after the WTO ruled against its policy of requiring foreign automakers to buy more than 40 percent of the components used in any China-made vehicle from local suppliers or pay more than double the usual tariff on imported parts.

The WTO ruling last year that such policies violate international trade rules was a rare coup for China’s trading partners. Beijing lost an appeal against the ruling in December.

China argued that the higher tariffs were needed to prevent automakers from evading steep vehicle import duties by importing cars in large chunks. The United States, the 27-nation European Union and Canada contended that the tariffs encouraged car parts companies to shift production to China, costing Americans, Canadians and Europeans their jobs.

Failure to change the policy could have resulted in the imposition of sanctions.

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