GENEVA — The U.S. locked horns with China in a World Trade Organization forum over the alleged failure by Beijing to notify hundreds of subsidy programs at the central, provincial and local government level.
During a two-day session of the WTO’s Committee on Subsidies and Countervailing Measures that ended Wednesday, the U.S. delegation said China’s notifications since it joined the WTO in 2001 were “grossly incomplete,” a WTO official said.
The U.S. filed a counter-notification to the SCM Committee, which oversees global subsidy rules, and argued China in its latest submission covering the period 2009 to 2014 had not notified a single subsidy administered at the provincial or local government level. Moreover, the central government measures notified did not include the amounts of subsidies outlayed.
The U.S. said it took the step after talks with China earlier this month failed to provide any meaningful responses to the U.S. concerns. In particular the U.S. pointed out China “has yet to notify a single steel subsidy measure.”
Concerns were also aired by the European Union, Japan and other WTO members. The Chinese delegation countered that it made great efforts to meet its WTO reporting obligations, but acknowledged it will soon supplement with a notification covering all subcentral subsidy programs.
Earlier this month, China and the U.S. signed a memorandum of understanding after the Asian nation agreed to terminate an export subsidy program in several industries, including textiles, apparel and footwear, stemming from a WTO case the U.S. brought against China last year.
In the same forum on Wednesday, the U.S. also aired its concerns that India is considering ushering in new export subsidies to its textiles and apparel industry, and took issue with efforts by New Delhi to prolong the phase-out of existing export subsidies in the sector.
The U.S. noted the WTO secretariat seven years ago released calculations that showed India had reached export competitiveness “in the sector no later than 2007, and under WTO subsidy rules India had eight years from that date to phase them out.”
While most government export subsidies are prohibited under WTO rules, there are exceptions that allow the poorest nations and some developing countries including India to use financial supports if they meet certain conditions.
However, the same WTO norms also stipulate that developing nations, such as India, can no longer benefit from the exemption from the subsidy prohibition if they have reached export competitiveness in a product. This could occur if exports of a product have reached a 3.25 percent share of world trade for two consecutive years and would require India to gradually phase out any export subsidies over a period of eight years.
The WTO calculations report released in 2010 found that product lines that met the 3.25 percent share included T-shirts, singlets, vests, girls suits, ensembles, jackets, blazers, dresses, skirts , trousers and overalls.
In response to the U.S. concerns, India said that since it provided its own information in 2010, it considered the elimination of the export subsidies would start from 2018.