ISLAMABAD: Pakistan is facing a catch 22 situation due to an upcoming legal fight between China and United States of America (USA) at the World Trade Organization (WTO).
According to sources in Commerce Ministry, Pakistan’s Mission at WTO has forwarded a Penal Request by China against the United States regarding certain subsidy measures adopted by Washington under the Inflation Reduction Act, 2022 that are contingent upon the use of domestic over imported goods, or that otherwise discriminate against goods of Chinese origin.
China has broadly categorized the measures at issue under two headings – the Clean Vehicle Credit and Renewable Energy Tax Credits.
The sources said, the US objected to the establishment of the Panel, however, if China brings the agenda to the next formal WTO Dispute Settlement Body meeting scheduled for September 23, 2024, the Panel will be established unless a negative consensus is achieved.
Commerce Ministry has sought views of concerned Ministries/ Divisions on whether Pakistan may become a party or a third party to the subject dispute.
On March 26, 2024, China requested consultations with the Government of USA pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), Article XXIII of the General Agreement on Tariffs and Trade 1994(GATT 1994), Article 8 of the Agreement on Trade-Related Investment Measures (TRIMS Agreement) and Articles 4 and 30 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement). Consultations were held on May 7, 2024 with view to reaching a mutually satisfactory solution, but those consultations failed to resolve the dispute.
