US, EU, Canada seen bringing WTO case against China

WASHINGTON, Sep 14 (Reuters) The United States, the European Union and Canada are expected to ask the World Trade Organization on Friday to establish a panel to hear their complaint about Chinese tariff policies they say discriminate against foreign auto parts, an EU official said on Thursday.

''Our intention is to (ask for a panel), and it is our understanding'' the United States and Canada will as well, the EU official said, speaking on condition he not be identified.

It would be the first complaint against China to reach the litigation stage since Beijing joined the WTO in 2001.

While it could signal the start of more vigorous efforts to ensure China plays by the rules, U.S. Trade Representative Susan Schwab said in a speech last month in Beijing that trade cases ''should not be seen as a hostile act.'' ''Dispute settlement provides an objective means for trade partners to resolve disputes that otherwise might fester and color the entire trade relationship,'' she said.

The United States and the European Union took the first step toward a WTO case in late March, when they asked Beijing for talks on tariff policies they said unfairly restricted foreign access to China's billion auto parts market.

Canada followed quickly with a request of its own, but months of talks produced no resolution of the issue.

Friday is the deadline for countries to place an item on the agenda for the Sept. 28 meeting of the Dispute Settlement Body, which oversees trade litigation in the WTO.

Sean Spicer, a spokesman for the U.S. trade representative's office, said last week it was very possible the United States could request a panel ''in the near future.'' He was more guarded when asked about the issue on Thursday.

''We are not commenting at this point on pending cases,'' Spicer said.

WTO rules allow China to block an initial request to establish a panel.

If that happens on Friday, the United States, the EU and Canada could make a second request at the Dispute Settlement Body's next meeting. Beijing would not be able to block that action.

Reuters VJ VP0305