August 31, 2012 / 1:47 PM / 5 years ago

China won't challenge WTO ruling in U.S. bank card row

GENEVA (Reuters) - China has decided not to appeal against a World Trade Organisation ruling that found it had discriminated against U.S. bank card suppliers such as Mastercard Inc (MA.N) and Visa Inc (V.N) in favour of a state-owned enterprise, China UnionPay.

China needed to declare its intention to appeal before a meeting of the WTO’s Dispute Settlement Body on Friday formally adopted a ruling published last month, which handed the United States an election-year trade policy victory against China.

A U.S. official at the meeting said the United States was “extremely pleased” that the ruling would not be appealed, according to a transcript of the diplomat’s remarks.

“The policies of China, as reflected in the measures at issue in this dispute, have caused pervasive discrimination at every stage of a card-based payment transaction and severely distorted competition in China’s market,” the unnamed official said.

The Chinese market for electronic payment services was worth well over $1 trillion per year, the official said.

However, although the ruling found that China UnionPay (CUP) had a monopoly on yuan payment cards issued and used in China, it rejected the U.S. claim that CUP was an “across-the-board monopoly supplier” for all transactions denominated in yuan.

The U.S. diplomat said the United States was disappointed that the ruling had stopped short of branding CUP as a “monopoly or exclusive supplier”.

China’s representative at the meeting said that claim had been the centrepiece of the U.S. case, and China commended the dispute panel for rejecting it.

However, despite China’s decision not to appeal, the Chinese official said that the ruling was not entirely free from error, and China was “troubled” by parts of the ruling.

Reporting by Tom Miles; editing by Stephen Nisbet

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