The United States on Monday formally requested dispute settlement consultations with China at the World Trade Organization regarding Beijing's treatment of U.S. suppliers of financial information services. The case could have a significant impact on how easily foreign firms in a range of service sectors, including logistics and transportation, have access to financial information that enables them to compete with local firms in China. China’s regulatory regime requires all suppliers of foreign financial information to operate through a single government-designated distributor. China prohibits foreign suppliers from establishing local operations that provide such services. United States Trade Representative Susan C. Schwab in a statement said that the Chinese regulatory agency “appears to have a conflict of interest, since the agency seems to be closely aligned with a Chinese competitor in the supply of these services.”
Washington believes that China’s treatment of foreign financial information suppliers violates WTO rules. Consultations are the first step in a dispute taken to the global trade body. “China’s restrictive treatment of outside suppliers of financial information services places U.S. and other foreign suppliers at a serious competitive disadvantage,” Schwab added. “We have raised this matter with China repeatedly, yet the problem has not been resolved. We hope the filing of our request for formal WTO consultations will lead to a swift resolution of this matter.” Under WTO rules, if the parties do not resolve an issue through consultations, the complaining party may refer the matter to the organization's dispute settlement panel. The restrictions and requirements currently imposed by China on suppliers of foreign financial information are even more restrictive than those in place at the time of China’s accession to the WTO, Schwab said. The European Union on Monday also requested formal consultations with China on the matter.
Journal of Commerce
