US seeks WTO settlement panel to judge Chinese subsidies

US seeks WTO settlement panel to judge Chinese subsidies

	Published : Thu, 12 Jul 2007 17:41 By : Agencies Print this Story

WASHINGTON (Thomson Financial) - The Bush administration today asked the World Trade Organization to establish a dispute settlement panel to judge whether Chinese subsidies violate WTO rules.

The request came after two rounds of consultations failed to convince China to eliminate several subsidies, although China earlier this year did eliminate one subsidy subject to the US challenge.

'China has taken a positive step by repealing one of the subsidy programs we challenged, but much more needs to be done,' spokesman for the US Trade Representative Sean Spicer said. 'We continue to prefer a negotiated settlement to this dispute, but without assurance of complete corrective action by China, we must continue to pursue the WTO process to enforce our rights.'

The US challenge targets several Chinese subsidies, including subsidies granted to companies that use domestic rather than imported components, and those given to promote exports, which the WTO says are prohibited.

Mexico has also requested WTO consultations with China, the first step toward a dispute settlement panel, and USTR said Mexico is expected to file its own request for a dispute panel today.

Dispute panels can take two years or more to litigate, as they can be appealed. Findings by the panel against certain policies often lead to agreements on a set amount of time by which the member in violation must comply with the ruling. However, members can also decide to keep the offending policy in place, and offer compensation to trading partners.

China has warned in recent months that the subsidies case in the WTO, as well as another US case against high Chinese auto parts tariffs and two potential cases involving intellectual property rights, are harming bilateral relations.

pete.kasperowicz@thomson.com

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