Bush Administration Protests Chinese Export Subsidies
The U.S. government is getting serious about halting alleged Chinese export subsidies that help bankroll branded products shipped overseas.
On Dec. 19, the U.S. Trade Representative’s office filed a claim with the World Trade Organization maintaining that China gives export subsidies to companies that make and sell Chinese branded items overseas. Industries affected include household electronic appliances, textiles and apparel, agricultural and food products, medicines, and health products.
The United States has requested the WTO set up consultations with China to put an end to the export-subsidy programs that the United States believes promote brand-name merchandise for sale around the world. Under WTO rules, export subsidies are prohibited.
“We were disturbed to find that China still appears to be using WTO-illegal measures to promote its exports, ranging from textiles and refrigerators to beer and peanuts,” U.S. Trade Representative Susan Schwab said in a statement. “We are determined to use all resources available to fight industrial policies that aim to unfairly promote Chinese branded products at the expense of American workers, farmers, ranchers, manufacturers and intellectual-property owners.”
After a lengthy investigation, the U.S. government said it discovered Chinese programs at the national and local levels that include cash grants for exporting, preferential loans for exporters, research-and-development funding to develop new export products, and payments to lower the cost of export credit insurance.
Branded products consistently sell at higher prices than generic products and often are more popular.
China said it consistently follows WTO rules and would work with the WTO to resolve the dispute. The two sides have 60 days to hold consultations. If no resolution occurs, the United States then can ask the WTO to set up a dispute-settlement panel. Because of the timeline, any further action will have to be undertaken by the Obama administration after the president-elect takes office on Jan. 20. —Deborah Belgum
