Today's Rumor: China to Sue India Over Toy Ban

♠ Posted by Emmanuel in ,, at 2/04/2009 03:25:00 PM
This will be a quick but potentially important one.China and India were supposed to be complementary powers. One specialized in manufacturing, the other in services. As a global slowdown takes hold, this sozy arrangement appears to be fraying. It now turns out that the world's two largest nations, China and India, are set for a WTO tussle over the latter's decision to ban imports of Chinese toys for a period of six months. Ostensibly aimed at preventing the importation of "toxic" toys, Beijing suspects New Delhi of trying to protect domestic toymakers. Talk about using a US-China spat as an excuse for protectionism elsewhere in the world. From the Hindu Business Online:
China is likely to drag India to the World Trade Organisation challenging the ban by New Delhi on Chinese toys, a media report said on Wednesday. “The Chinese government is mulling a response to India's recent ban on Chinese toy imports and will probably ask the World Trade Organisation to investigate whether the ban violates WTO laws,'' the China Daily said quoting an anonymous source close to the issue.

India had banned import of Chinese toys on January 23 for six months. While the Directorate General of Foreign Trade (DGFT) in the Indian Commerce Ministry did not cite any reason for the ban, officials said the prohibition was necessary to protect kids from toxic hazards that may be associated with Chinese toys.

However, it is perceived here that ban by New Delhi was aimed at providing protection to the domestic industry from the Chinese manufacturers which claimed at least half of Rs 2,500 crore Indian toy market.

“It is a sign that China will be leveraging WTO rules to help protect its manufacturers from illegal trade barriers and punitive measures by its trading partners at a time when protectionism is growing amid the global economic recession,'' the newspaper said.
It's about time we got some South-South action going as well. I think that if the Chinese do pursue this case, its impact will be blunted for the ban will have been lifted by the time it gets underway.