US sends 70 questions to WTO about China’s subsidies

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Dennis Shea (right) US Ambassador to the WTO talks with Xiangchen Zhang, Chinese Ambassador to the WTO. Reuters

GENEVA (Reuters) – The United States has accused China of hiding some trade-distorting subsidy programmes from international scrutiny while disclosing others it does not need to, according to a document circulated yesterday at the World Trade Organization.

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The US document lists 70 questions about Beijing’s subsidy programmes that highlight Washington’s misgivings about the role the state plays in China’s huge and growing market.

China is fighting a major trade dispute at the WTO against US and EU claims that China is not a “market economy” and therefore that its export prices should not be taken at face value when evaluating whether it is trading fairly.

Topics covered by the US questions include subsidies for China’s fishing industry and the activity of so-called government guidance funds, which seek to foster domestic innovation in different industries from advanced engineering and robotics to biotechnology and clean energy.

There were also questions about whether imported cars were eligible for tax breaks and scrappage schemes and whether imported goods were eligible for a Chinese fund for promoting energy saving products.

The US document was sent to the WTO’s subsidies committee in response to a notification by China about subsidies programmes it is obliged to disclose for transparency purposes.

China did not immediately respond to the US document. It would normally be expected to file its responses with the WTO committee in a similar document, which is likely to take months to appear.

The United States said in the document it appreciated that for the first time China had notified both central and sub-central subsidies in one document, adding:

“Unfortunately, as was true for China’s previous notifications, China’s most recent notification suffers from both severe under-reporting of important programs and significant over-reporting of irrelevant or minor programs.”

Providing transparency about trade policies is a key job of the WTO, and the United States has been vocal about wanting China, India, Vietnam and other WTO members to improve the standard and their timeliness of their notifications.

US President Donald Trump has threatened to withdraw from the global trade body if it doesn’t “shape up”.

The United States has teamed up with Japan and the European Union to pursue improvements in international trade. After meeting earlier this month, they said they planned to finalise “text-based work” on industrial subsidies early this year and then engage other key WTO members.

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