US claims trade victory over China over business jet tax

President Barack Obama's administration said today it has scored another trade victory over China, after Beijing ended a disputed tax policy that favored Chinese-produced aircraft in violation of global trade rules.
The US Trade Representative filed a dispute in December with the World Trade Organization, charging that China's 17 percent value-added tax on smaller aircraft, such as business jets, discriminated against imported aircraft.
China's decision to end the tax exemptions for aircraft under 25 metric tons effectively ends the WTO dispute settlement process, which can take six to nine months.
USTR Michael Froman applauded the victory but stressed that the administration will remain watchful for other practices that impede free trade of US products in China.

"While we are happy to announce this discrimination has ended, we remain deeply concerned about China's lack of transparency on taxes affecting American products," Froman said in a statement.
"Transparency is a core obligation in the international trading system. China should not impose discriminatory taxes or conceal them."

China is one of the fastest-growing aviation markets in the world. The USTR cited estimates by Chinese regulatory agencies of annual growth of about 19 per cent a year in general aviation aircraft through 2020.
The US aerospace sector employs nearly 500,000 people and is a major exporter, and Washington has long been quick to defend it against alleged unfair treatment.

Trade is a chronic irritant between the countries as China's massive economy depends largely on exports for growth, and the United States is its biggest import market.