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WTO: China discriminates against foreign card companies | WTO: China discriminates against foreign card companies |
(about 9 hours later) | |
The World Trade Organization (WTO) has ruled that China discriminates against foreign credit-card and debit-card providers. | |
A panel of the trade body said China maintains a monopoly on yuan-denominated payment cards which breaks WTO rules. | A panel of the trade body said China maintains a monopoly on yuan-denominated payment cards which breaks WTO rules. |
Only one company, China UnionPay, is allowed to process domestic currency transactions. | Only one company, China UnionPay, is allowed to process domestic currency transactions. |
This limits foreign providers such as Visa and Mastercard. | This limits foreign providers such as Visa and Mastercard. |
There is a 60-day period in which either side can appeal against the ruling. | There is a 60-day period in which either side can appeal against the ruling. |
Greater participation | Greater participation |
The Obama administration first lodged the complaint in 2010. | The Obama administration first lodged the complaint in 2010. |
US companies have been trying to get greater access to the massive China market. | US companies have been trying to get greater access to the massive China market. |
Currently, they can only issue cards in partnership with Chinese banks and China UnionPay. | Currently, they can only issue cards in partnership with Chinese banks and China UnionPay. |
Visa said in a statement that the company is "hopeful that this ruling will pave the way for international payment companies to participate in the domestic payments marketplace in China". | Visa said in a statement that the company is "hopeful that this ruling will pave the way for international payment companies to participate in the domestic payments marketplace in China". |
Political battle | Political battle |
The decision by the WTO is being hailed as a "win" by the US government. The trade gap with China has become a campaign issue in the upcoming elections. | The decision by the WTO is being hailed as a "win" by the US government. The trade gap with China has become a campaign issue in the upcoming elections. |
"Today's win highlights that tackling unfair Chinese trade practices has been a priority of this president," said Jay Carney, White House press secretary. | "Today's win highlights that tackling unfair Chinese trade practices has been a priority of this president," said Jay Carney, White House press secretary. |
Tim Reif from the US Trade Representative's office said the ruling would support about 6,000 jobs if it goes through. | Tim Reif from the US Trade Representative's office said the ruling would support about 6,000 jobs if it goes through. |
However, the WTO did not agree with all the claims raised by the United States. | However, the WTO did not agree with all the claims raised by the United States. |
The panel ruled that China UnionPay had a monopoly on yuan payment cards issued and used in China, but stopped short of saying it was an "across-the-board monopoly supplier" for all transactions made in local currency. | The panel ruled that China UnionPay had a monopoly on yuan payment cards issued and used in China, but stopped short of saying it was an "across-the-board monopoly supplier" for all transactions made in local currency. |
Mr Reif, however, said China would still have to fix the discrimination in the system. | Mr Reif, however, said China would still have to fix the discrimination in the system. |