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US Likely to Lose WTO Auto Case Against China: Expert

Huang Junmin |Assistant Producer, CNBC Asia-Pacific
Friday, 6 Jul 2012 | 5:26 AM ET

The United States has filed a complaint with the World Trade Organization (WTO), accusing China of imposing unfair duties on its automobile exports, but an expert told CNBC's "Cash Flow" he expects the U.S. will lose the case.

An employee stacks grills for Geely Automobile Holdings Ltd. Emgrand 7 series automobiles at the company's factory in Cixi, Zhejiang Province, China.
Bloomberg | Getty Images
An employee stacks grills for Geely Automobile Holdings Ltd. Emgrand 7 series automobiles at the company's factory in Cixi, Zhejiang Province, China.

"Very likely the U.S. will lose, in my opinion, when it goes to the WTO," said Jagdish Bhagwati, Former External Adviser to the WTO and now a professor at Columbia University.

The U.S. wants the WTO to force China to rollback anti-dumping and countervailing duties it imposed on $3.3 billion worth of U.S. auto exports in December 2011.

The U.S. administration believes China unfairly targeted Detroit's auto industry because it was bailed out by the government to the tune of $80 billion at the height of the global financial crisis.

Meanwhile, President Obama kick-started his campaign tour in Ohio, home to thousands of auto-supply workers, where he promised to push for a fair playing field with China.

Bhagwati warned that Obama should tone down his anti-China rhetoric as he continues campaigning for support in the months leading up to November's presidential elections.

"(Obama) forgets for example that General Motors has turned around not because of the bailout but because General Motors is investing heavily in the Chinese market. We need these markets," he said.

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