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China Export Subsidies Being Challenged at WTO Subject of USTR Inquiry

Tuesday, May 12, 2015
Sandler, Travis & Rosenberg Trade Report

The Office of the U.S. Trade Representative is inviting comments on the issues raised in a World Trade Organization case examining whether certain Chinese measures are providing export-contingent subsidies to enterprises in several industrial sectors. The WTO recently established a dispute settlement panel to review this case.

According to USTR, it appears that China provides export-contingent subsidies through a program establishing “Foreign Trade Transformation and Upgrading Demonstration Bases” and “Common Service Platforms.” Demonstration bases are industrial clusters of enterprises in several industries, including textiles, agriculture, medical products, light industry, special chemical engineering, new materials, and hardware and building materials. Common service platforms are service suppliers designated by China to provide services to enterprises in demonstration bases. The U.S. alleges that these services include export-contingent subsidies, such as discounted or free services or the provision of grants, that violate the express prohibition on export subsidies in WTO rules.

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