US accuses China of handing out “prohibited export subsidies”
13/02/2015
The dispute concerns what he called an extensive export subsidy programme under which, he claimed, China “seems to provide prohibited export subsidies” to manufacturers across seven economic sectors in 179 industrial clusters throughout China. Footwear production, specialty chemicals and light industry, which, for the Chinese government, includes leather production, are among the sectors concerned.
Allegations from the US centre on manufacturing clusters called ‘Demonstration Bases’. Michael Froman’s department insists it has evidence of Chinese manufacturers receiving “an unfair advantage” in the arena of global trade through direct subsidies to exporters from the Chinese government and also through a programme of subsidies to suppliers. The suggestion is that suppliers have received government subsidies, to the tune of $1 billion in the last three years, the US alleges, in return for supplying free or discounted services to Chinese exporters.
Consultations are the first step in the WTO dispute settlement process. If the US and China are not able to reach a mutually agreed solution through these consultations, the US may request the establishment of a WTO dispute settlement panel.
Share this story:
