Tags: China | WTO | Ruling | Bank

China Won't Challenge WTO Ruling in US Bank-Card Row

Friday, 31 August 2012 01:53 PM

China has decided not to appeal against a World Trade Organization ruling that found that Beijing had discriminated against U.S. bank card suppliers such as MasterCard Inc. and Visa Inc. in favor of a state-owned enterprise, China UnionPay.

China needed to declare its intention to appeal before a meeting of the WTO's Dispute Settlement Body on Friday formally adopted the ruling published last month.

A U.S. official at the meeting said the United States was "extremely pleased" that the ruling would not be appealed, according to a transcript of the unidentified diplomat's remarks.

"The policies of China, as reflected in the measures at issue in this dispute, have caused pervasive discrimination at every stage of a card-based payment transaction and severely distorted competition in China's market," the official said.

In a statement, China played down the significance of the July ruling, which President Barack Obama's administration welcomed as a major victory in its effort to open China's financial services sector to more foreign competition.

"In fact, China's electronic payments market is already very open," China's Commerce Ministry said. "The panel's decision rejected the U.S. charges that UnionPay was the only service provider, and affirmed that (China's policy) does not prevent foreign service providers from entering China's market."

The U.S. official said the Chinese market for electronic payment services was worth well over $1 trillion a year.

However, although the ruling found that China UnionPay (CUP) had a monopoly on yuan payment cards issued and used in China, it rejected the U.S. claim that CUP was an "across-the-board monopoly supplier" for all transactions denominated in yuan.

The U.S. diplomat said the United States was disappointed that the ruling had stopped short of branding CUP as a "monopoly or exclusive supplier."

China's representative at the meeting said that claim had been the centerpiece of the U.S. case, and China commended the dispute panel for rejecting it.

However, despite China's decision not to appeal, the Chinese official said that the ruling was not entirely free from error, and China was "troubled" by parts of it.

The Chinese Commerce Ministry, in its statement, said China believed "cooperation and competition" between domestic and foreign companies would help develop its payments market.

"China will continue to push forward with reform and opening up and international cooperation in the electronic payments market," the ministry said.

© 2019 Thomson/Reuters. All rights reserved.

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Friday, 31 August 2012 01:53 PM
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