China has agreed to end dozens of export subsidies for Chinese branded goods rather than fight a battle with the US at the WTO, the US Trade Representative (USTR) said on Friday.
The subsidies covered a wide range of Chinese products sold around the world, including household electronic appliances, textiles and apparel, light manufacturing industries, agricultural and food products, metal and chemical products, and medicine, the USTR said.
“This outcome represents a victory for the full spectrum of US manufacturers and their workers, given the reach of these Chinese industrial policy initiatives,” USTR Ron Kirk said in a statement hailing an agreement the two countries had signed.
The administration of former US President George W. Bush launched the WTO complaint in December last year, challenging what it called a vast number of Chinese central, provincial and local government subsidies aimed at boosting exports of Chinese “famous brand” goods around the world.
The case marks the fourth time China has resolved a WTO complaint filed by the US without waiting for a dispute settlement panel to rule on the matter. That’s out of eight WTO cases Washington has brought so far against Beijing.
“From our perspective, we think that shows there is a pragmatism about fixing problems when they are identified, at least in certain circumstances,” a US trade official told reporters, speaking on condition on anonymity.
The huge US trade deficit with China continues to be a sore spot in bilateral relations, although it has fallen this year along with a downturn in world trade.
US trade officials said it was hard to put a precise US dollar amount on the subsidies, but said they identified more than 90 separate government measures providing what appeared to be WTO-inconsistent financial support.
“China is confirming that it has in fact eliminated all of them and we obviously have documentation showing that,” the US trade official said.
The programs include the “Famous Export Brand,” “China World Trade Brand” and “China Name Brands Products” initiatives by the central government, and various provincial and local programs that flowed from them.
During consultations early this year on the dispute, China indicated they wanted to resolve US concerns by eliminating the programs or modifying them to conform with WTO rules, the US trade official said.
“It was an arduous process,” but the US is satisfied with the steps China has taken and confident the problems it identified won’t resurface in another form, the trade official said.
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