VZCZCXRO1332
OO RUEHCN RUEHGH RUEHVC
DE RUEHBJ #6005 2561110
ZNR UUUUU ZZH
O 131110Z SEP 07 ZDK
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1785
RUCPDOC/USDOC WASHDC IMMEDIATE
INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 1952
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY

UNCLAS BEIJING 006005 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM SECOR AND YAMAMOTO 
STATE FOR EB/TPP/BTA TSAEGER AND ESAGURTON 
TREASURY FOR OASIA/ISA/DOHNER AND HAARSAGER 
USTR FOR CHINA OFFICE 
COMMERCE FOR ITA/ITA DAVID SPOONER, ITA/IA MICHAEL ROLLIN 
COMMERCE FOR ITA/MAC MACQUEEN 
NSC FOR TONG 
DEPT PASS USITC LYNN LEVINE 
GENEVA FOR USTR 
 
E.O. 12958: N/A 
TAGS: ECON ETRD CH
SUBJECT: CHINA REQUESTS CONSULTATIONS REGARDING U.S. 
COUNTERVAILING DUTY CASE ON COATED FREE SHEET PAPER 
 
 
¶1. (SBU) On September 13, 2007, Ministry of Commerce (MOFCOM) 
American and Oceanian Affairs Deputy Director General (DDG) 
Wang Hongbo summoned Embassy Deputy Senior Commercial Officer 
and USTR Senior Trade Representative to inform them that the 
Chinese Government will file a request for consultations with 
the United States in the WTO on September 14 regarding the 
United States countervailing duty case on coated free sheet 
paper. 
 
 ¶2. (SBU) DDG Wang said that the Chinese Government deeply 
regrets the decision of the United States to initiate 
countervailing duty cases on China, a non-market economy. 
Wang noted that the Chinese Government considers it unfair 
and against WTO rules to apply double investigations on 
non-market economies: i.e., the United States should not 
conduct both countervailing duty and antidumping cases on the 
same product from a non-market economy.  Wang noted that in 
March 2007 the United States applied "unjustified" 
provisional countervailing duties on imports of coated free 
sheet paper and since then had initiated additional 
countervailing duty cases.  Despite repeated discussions 
between the two governments on this issue, including 
discussions led by MOFCOM Minister Bo Xilai, the United 
States had continued these countervailing duty 
investigations, Wang said. 
 
¶3. (SBU) The DDG explained that on September 14 the Chinese 
Government will file a request for consultations with the 
United States in the WTO Dispute Settlement Body regarding 
the countervailing duty investigation on coated free sheet 
paper.  Wang noted that although the Chinese Government 
considers the relationship between the two countries to be of 
great importance, the Chinese Government, given the 
"unjustified actions" of the United States in this matter, 
has determined that it must exercise its WTO rights. 
 
¶4. (SBU) In closing, Wang noted that the Chinese Mission to 
the WTO will file the request and inform the U.S. Mission in 
Geneva tomorrow, and that the Chinese Embassy in Washington, 
D.C. will contact its United States Government counterparts 
tomorrow as well.  Wang said that the Chinese Government 
hopes that a satisfactory conclusion might be reached within 
the WTO framework. 
Randt