The World Trade Organisation (WTO) Director-General, Ngozi Okonjo-Iweala, has appointed a three-member panel to adjudicate China’s complaint that subsidies and incentives under the U.S. Inflation Reduction Act (IRA) violate global trade rules.
The panel will be led by former Attorney General, Athaliah Molokomme. China formally requested Okonjo-Iweala to appoint the panel after negotiations with the United States to agree on adjudicators reached a stalemate. The appointment comes nearly nine months after Beijing initiated consultations over the landmark climate-focused provisions, highlighting the slow pace of WTO’s dispute resolution mechanisms.
Athaliah Molokomme, a Yale-trained lawyer and Botswana’s former ambassador to the WTO will chair the panel. She will be joined by Amina Mohamed, a former Kenyan ambassador to the WTO, and Elaine Feldman, a seasoned Canadian trade diplomat.
China’s complaint primarily targets U.S. subsidies for electric vehicle production and other tax incentives aimed at promoting clean energy. The provisions, introduced under the Biden administration’s IRA, aim to accelerate the transition to a greener economy. However, Beijing has criticised them as discriminatory against foreign manufacturers.
According to the WTO, the dispute concerns China’s challenge to U.S. measures that impose additional ad valorem duties on certain products imported from China. These duties were introduced following the findings of an investigation by the United States Trade Representative (USTR) into China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation under Section 301 of the Trade Act of 1974 (Section 301 Report). The United States has raised arguments in defense against China’s claims.
The WTO notes that on April 4, 2018, China requested consultations with the United States pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) and Article XXIII of the General Agreement on Tariffs and Trade 1994 (GATT 1994) regarding the measures and claims outlined.
Subsequent consultations were requested by China on July 6, 2018; July 16, 2018; and September 18, 2018, through addenda to its initial request. These consultations pertained to subsequent related legal instruments. Consultations were held on August 28, 2018, and October 22, 2018, but they failed to resolve the dispute.
On December 6, 2018, China requested the establishment of a panel pursuant to Articles 4.7 and 6 of the DSU and Article XXIII of the GATT 1994 with standard terms of reference. At its meeting on January 28, 2019, the Dispute Settlement Body (DSB) established a panel pursuant to China’s request, as documented in WT/DS543/7 and in accordance with Article 6 of the DSU.
The panel’s terms of reference are as follows: “To examine, in the light of the relevant provisions of the covered agreements cited by the parties to the dispute, the matter referred to the DSB by China in document WT/DS543/7 and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements.”
