US launches trade case against China’s export subsidy program

Top trade officials and congressional lawmakers said Wednesday that the United States is launching a challenge to China’s extensive export subsidy program.

U.S. Trade Representative Michael Froman said Beijing appears to be providing the prohibited export subsidies to manufacturers and producers across seven economic sectors and dozens of other sectors throughout China that are harmful to U.S. workers and businesses.

{mosads}”This program may not be well known here at home, but it has potential ramifications for important American industries from coast-to-coast that help support good jobs and grow our economy by selling American-made products all over the world,” Froman said.

Under the program, China provides free and discounted services as well as cash grants and other incentives to sectors that meet export performance criteria.

“In our view, this program violates the commitment China made when it joined the WTO not to provide certain export subsidies,” Froman said.

“In doing so, it injures American workers, farmers, ranchers, and businesses — really anyone who plays by the rules and wants to compete fairly, on the merits of their hard work and the quality of their products.”

The sectors involved include textiles, apparel and footwear; advanced materials and metals; specialty chemicals; medical products and agriculture.  

“Today’s action against China is important to American industry, particularly the textile industry, which has suffered from a lack of enforcement of international standards,” said Rep. David Price (D-N.C.).

“While the WTO’s rules are limited in scope, they do provide an important framework for our international economic relationships, and it is imperative that the USTR enforce them.”

The United States previously brought a World Trade Organization (WTO) challenge to what appeared to be prohibited export subsidies that China provides for auto and auto parts manufacturers.  

After requesting consultations with China on those subsidies in an effort to resolve its concerns, USTR’s concerns grew that China had created a subsidy program that expanded to many other industries.

“China’s actions are damaging our international marketplace, undercutting American businesses, and hurting workers in communities across our country,” said Rep. Mike Thompson (D-Calif.).

“This case is about making sure the playing field is level and that China operates under the same fair and basic set of rules that American businesses and workers must abide by.”