China Blocks U.S. Call for WTO Rulings on Credit Cards, Steel

China blocked a request by the U.S. for World Trade Organization judges to rule on the legality of Chinese anti-dumping duties on steel products and restrictions on companies that process credit-card payments.

The U.S. made the request today in Geneva, five months after asking for consultations with China aimed at resolving the two disputes. China can’t block a second request, likely to come in March.

The U.S. is protesting limits on payment processing by companies such as Visa Inc. and MasterCard Inc. because China favors a monopoly provider, China UnionPay Data Co. China prohibits foreign companies from issuing their own bank cards denominated in its currency, building networks to support such cards or processing interbank point-of-sale transactions.

Foreign banks must “co-brand” with Chinese operators to supply these services and execute payments through UnionPay. The U.S. Trade Representative’s office says the rules run counter to the pledge China made when it joined the WTO in 2001 to open up its credit- and debit-card markets to foreign processing companies by the end of 2006.

The U.S. also wants WTO judges to rule on the legality of dumping duties China imposed on more than $200 million of American-made steel products. The complaint involves dumping and countervailing duties China has placed on flat-rolled steel, which is produced by companies such as West Chester, Ohio-based AK Steel Holding Corp., the third-largest U.S. steelmaker.

China, the world’s biggest steel market, said in 2009 it would apply anti-dumping and subsidy levies of as much as 25 percent on flat-rolled electrical steel products, used in transformers, reactors and electric machines. China said the duties aim to counter below-cost or “dumped” imports of the goods.

The U.S. says China didn’t follow WTO procedures by failing to disclose the facts underlying its legal conclusions and not explaining its calculations.

To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net