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WTO to rule on U.S. payment card dispute with China
July 16, 2012 / 1:18 PM / in 5 years

WTO to rule on U.S. payment card dispute with China

GENEVA, July 16 (Reuters) - The World Trade Organization will publish a ruling on Monday in a dispute launched by the United States in 2010 over market access for credit cards and debit cards in China, which Washington accuses of running a virtual monopoly.

The ruling is expected to be published around 1430 GMT. Either side can appeal and if they do so the case will be considered by the WTO’s Appellate Body, which would take up to 90 days to issue a final ruling.

In its complaint launched in September 2010, the United States said China was keeping foreign firms out of the market for electronic payment services denominated in China’s currency, the yuan.

With firms such as Visa Inc, Mastercard and American Express restricted to foreign currency transactions, China UnionPay (CUP) enjoyed a monopoly position in local currency electronic payment services.

The U.S. complaint also said China required all card processing devices in China had to be compatible with CUP’s cards, giving it guaranteed access, while other card firms had to negotiate for access to merchants. And all payment cards had to bear the CUP logo.

Mastercard’s chief executive Ajay Banga told a conference in May that he was looking forward to the rules changing to create a more level playing field, although almost every new card issued in China and usable abroad was a Mastercard, which had changed the company’s entire position in China.

“The complication in China is that CUP is effectively owned and regulated by the People’s Bank of China, who is also our regulator. So our regulator is also our competitor, which is the ultimate conflict of interest you can think of,” he said, according to a transcript provided by ThomsonReuters Streetevents.

“So that’s the issue that the WTO is struggling with. Once they come out of that, we will see what they say and how this landscape changes.”

The adjudicators on the dispute panel set up by the WTO were Thai diplomat Virachai Plasai, who chaired the panel, the head of Canada’s Environmental Assessment Agency Elaine Feldman and Argentina’s former central bank chief Martin Redrado.

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