China appears ready to negotiate with the European Union, US and Canada to seek an agreement on a trade row over car parts.

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The EU, US and Canada called on the World Trade Organisation to pressure China to open up its $US19bn automotive components market in March this year.


The Western powers claimed that Beijing’s tariff policies hinder access to the market by overseas component manufacturers and they accused China of unfairly helping its exporters.


China normally taxes car parts at 10%. However, the country’s tax regime considers parts a “whole vehicle” if they account for 60% or more of the value of the final vehicle and therefore charges a higher tariff on them, which the EU and its supporters believes is discriminatory.


However, remarks by EU Ambassador Serge Abou suggest talks on the matter are progressing.

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Quoted in a report by Reuters, he claimed Zhang Guobao, vice-chairman of the National Development and Reform Commission, China’s top economic planning agency, told a visiting EU delegation that Beijing was ready for discussions on the dispute.


Speaking at a news conference Abou said: “For the first time we have seen from the Chinese side, from the NDRC, a clear will expressed by the vice-chairman to discuss the issue with the European Union.”


Abou said the EU believed China’s tariff regime on car parts was “not compatible with China’s WTO commitment.” He added that Beijing was now willing to discuss that.


With the consultation process continuing Abou said the EU had not yet decided to go for litigation over the issue.