A shipping container is offloaded from the Hong Kong based CSCL East China Sea container ship at the Port of Oakland on June 20, 2018 in Oakland, California (JUSTIN SULLIVAN)

Geneva (AFP) – China is planning to ask the World Trade Organization next week for permission to impose more than $7 billion in sanctions annually on the United States over anti-dumping practices.

The WTO said Tuesday that a special meeting of its Dispute Settlement Body would be convened on September 21 to discuss developments in a five-year-old trade dispute.

The news sparked fears of a new escalation in the burgeoning trade war between the world’s top two economies, and put pressure on European and US stock markets.

The case dates back to December 2013, when China filed a dispute against the United States, taking issue with the way Washington assesses whether exports have been “dumped” at unfairly low prices onto the US market.

The use of anti-dumping duties are permitted under international trade rules as long as they adhere to strict conditions, and disputes over their use are often brought before the WTO’s Dispute Settlement Body. 

In this specific case, China alleged that the United States, in violation of WTO rules, was continuing a practice known as “zeroing”, which calculates the price of imports compared to the normal value in the United States to determine predatory pricing.

In October 2016, a panel of WTO experts found largely in China’s favour in the case, including on the issue of “zeroing”.

The United States, which has repeatedly lost cases before the WTO over its calculation method, said in June last year that it would implement the panel’s recommendations within a “reasonable” time frame.

This past January, the DSB set an August 22 deadline for Washington to bring its practices in line with the 2016 ruling.

According to WTO rules, the plaintiff in such cases can request permission to impose sanctions if the parties have not reached agreement on a satisfactory compensation within 20 days of the WTO deadline. 

According to the Chinese request, which was circulated to WTO members Tuesday, Beijing “requests authorisation from the DSB to suspend concessions or other obligations with respect to the United States at a level equivalent to the nullification or impairment suffered as a result of the failure of the United States to comply with the recommendations and rulings of the DSB.”

“Based on analysis of currently available data,” the document said, “the level of nullification or impairment totals approximately $7.043 billion annually.”

“China will update the level of suspension of concessions or other obligations annually using the most recently available data,” it added.

Washington will nonetheless still have the right to oppose any sanction decision, opening the way for a lengthy arbitration process that could take months to settle.

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