USTR Seeks Comments on WTO Dispute with China over Subsidies

Issue 19, 2007 (13 September)

The Office of the U.S. Trade Representative is seeking comments by 5 October on the issues raised in a WTO case filed by the U.S. against China's continued use of subsidies that appear to be prohibited by WTO rules. The U.S. argues that China maintains measures that provide enterprises in China with refunds, reductions or exemptions from taxes otherwise due to the government on the condition that those enterprises purchase domestic over imported goods or meet certain export performance criteria.
The U.S. and Mexico held two rounds of consultations with Chinese authorities on this matter earlier this year in an effort to reach a mutually agreeable solution. The consultations did not resolve the dispute, however, which compelled the U.S. and Mexico to file separate requests on 13 July for the establishment of a dispute settlement panel. China blocked those requests on 24 July but they were subsequently re-filed and accepted on 31 August, which means that a panel will be established shortly. The panel will have six months from its establishment to issue its final report to the parties involved in the dispute. The report will be made available to all WTO members three weeks later, at which time China, the U.S. or Mexico will have the option of filing an appeal with the Appellate Body. If that occurs, the Appellate Body would have a maximum of 90 days to render a final verdict.


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