* Panel says U.S. broke WTO rules in deciding tariffs
* But Washington sees bright side of findings
* Cases reflect wider concern over U.S. trade measures
(Recasts throughout, expands, includes India findings)
By Robert Evans
GENEVA, July 14 World Trade Organisation judges
said on Monday the United States broke its rules in imposing
hefty duties on Chinese steel products, solar panels and a range
of other goods that Washington argues enjoyed government
In a similar case involving U.S. methods in deciding when
foreign imports are unfairly priced, another WTO panel ruled in
support of some claims by India against tariffs on steel exports
from three of its major firms.
Trade diplomats said the two cases, both under scrutiny for
nearly two years by the separate panels, reflected a widespread
concern in the 160-member WTO over what many see as illegal U.S.
protection of its own producers.
In the $7.2 billion Chinese case, the panel found that
Washington had overstepped the mark in justifying the so-called
countervailing duties it imposed as a response to alleged
subsidies to exporting firms by China's government.
Under the 1964 Marrakesh accords, which also set up the WTO,
these duties can only be levied when there is clear evidence
that state-owned or partially state-owned enterprises passing on
the subsidies are "public bodies."
The panel found that Washington had produced insufficient
evidence for this, and was also at fault in its calculations of
the value of the subsidies to Chinese firms producing items like
kitchen shelving, grass cutters and even citric acid.
And it told the United States it should adapt its measures
to bring them into line with the WTO's agreement on subsidies
and countervailing measures, dubbed the SCM in trade jargon.
The ruling, which gave the United States some comfort in
rejecting some aspects of the Chinese complaint, was welcomed in
a statement from China's Ministry of Commerce distributed by
Beijing's trade mission in Geneva.
"China urges the United States to respect the WTO rulings
and correct its wrongdoings of abusively using trade remedy
measures, and to ensure an environment of fair competition for
Chinese enterprises," the statement said.
The United States said it was weighing its options.
U.S. Trade Representative Michael Froman said the decision
to reject many of China's challenges was a victory for American
businesses and workers.
"With respect to the other findings in the panel report, the
Administration is carefully evaluating its options, and will
take all appropriate steps to ensure that U.S. remedies against
unfair subsidies remain strong and effective."
Many other members of the organisation, including the
European Union and Japan, declared themselves interested parties
in the disputes, although they did not say if their sympathies
lay with the United States or its challengers.
The ruling in the Indian case - which involves steelmakers
like Tata, Jindal and Essar who
are supplied by the state-run iron-ore mining firm, NMDC - was
not so clear-cut.
It said the United States had "acted inconsistently" in
terms of some provisions of the SCM agreement and had unfairly
reduced Indian trade revenue. Washington should bring its
measures into line with the pact, the panel said.
But it rejected many of the technical aspects of the Indian
Froman hailed the panel ruling while recognising it as a
"The panel's findings rejecting most of India's numerous
challenges to our laws and determinations is a significant
victory for the United States and for the (U.S.) workers and
businesses making these steep products," he said.
(Reporting by Robert Evans, with additional reporting by Krista
Hughes in Washington, Editing by Angus MacSwan)