USTR Requests Comments on WTO Consultations with China Regarding Alleged Prohibited Subsidies
The Office of the U.S. Trade Representative (USTR) has issued a notice and request for comments on the U.S. request for World Trade Organization (WTO) consultations with China regarding its provision of subsidies that appear to be prohibited by WTO rules.
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Comments should be submitted on or before March 12, 2007 to be assured of timely consideration by the USTR.
(See ITT's Online Archives or 02/06/07 news, 07020620, for earlier BP summary of the U.S. request for these WTO consultations.)
U.S. Alleges Prohibited Granting of Refunds, Reductions/Exemptions from Taxes, Etc. by China
According to the USTR, the U.S. has requested consultations with China regarding certain measures granting refunds, reductions or exemptions from taxes and other payments owed to the government by enterprises in China. These measures include nine subsidy programs, as well as any amendments and related or implementing measures.
The USTR states that three of the challenged subsidy programs appear to be import substitution subsidies, conditioning income tax and value-added tax refunds on the recipient's purchase of domestic over imported goods. The USTR adds that by conditioning financial incentives on an enterprise's purchase of domestic over imported equipment, the three import substitution subsidies also appear to treat imported products less favorably than domestic products.
The USTR states that the other six challenged programs appear to be export subsidies, to the extent that they offer refunds, reductions or exemptions from taxes and other payments owed to the government, on the condition that the beneficiary enterprises meet certain export performance criteria.
Dispute Settlement Panel May Be Requested After 60 Days
According to the WTO,consultations are the first step in a WTO dispute. Under WTO rules, parties that do not resolve a matter through consultations within 60 days may request the establishment of a WTO dispute settlement panel.
- comments should be submitted on or before March 12, 2007 to be assured of timely consideration by the USTR (See USTR notice for details on the submission of comments.)
USTR contact - Arun Venkataraman (202) 395-5694
USTR notice (D/N WTO/DS-358, FR Pub 02/21/07) available at http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-2855.pdf
WTO dispute summary (updated 02/02/07) available at http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds358_e.htm
BP Note
In December 2006, the International Trade Administration (ITA) requested comments on whether it should apply the countervailing (CV) duty law to imports from China. The ITA stated that it intends during the course of the present CV duty investigation on coated free sheet paper from China to determine whether the CV duty law should now be applied to imports from China. (Since at least 1986, the ITA has exercised its discretion to not apply the CV duty law to non-market economy (NME) countries, such as China and Vietnam.)
(See ITT's Online Archives or 12/19/06 news, 06121925, for BP summary of ITA request for comments. See ITT's Online Archives or 11/28/06 news, 06112835, for BP summary of ITA's notice initiating the CV duty investigation on coated free sheet paper from China.)