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U.S. Brings WTO Case vs. China on Export Subsidies

The United States Trade Representative in late December filed a dispute settlement case with the World Trade Organization against what it termed "unfair" export support by the People's Republic of China.

The USTR statement on the case referred to "numerous subsidies at multiple levels of government" in China, including "cash grant rewards for exporting, preferential loans for exporters, research and development funding to develop new products for export, and payments to lower the cost of export credit insurance."

The USTR statement added, "These subsidies apply across the economy and therefore may unfairly alter the competitive landscape around the world for any industry competing with these Chinese products."

Textiles were among the categories cited in the USTR filing.

The American Manufacturing Trade Action Coalition (AMTAC) hailed the USTR action, and asserted, "The genesis of this case was an investigation that AMTAC and other industry trade associations recently conducted on illegal Chinese subsidies as they specifically relate to the textile and apparel sector."

AMTAC executive director Auggie Tantillo said, "Eliminating China's illegal export subsidies are of paramount importance to U.S. manufacturers."

Tantillo added, "AMTAC looks forward to working with the present Administration and the incoming Obama Administration and Congress to eliminate China's WTO-illegal export subsidies."

AMTAC pointed to these findings it has researched:

  • For year-to-date October 2008, the United States has run a $223.4 billion trade deficit with China in goods. Compared to the same period in 2007, the U.S. goods trade deficit with China has increased by $9.9 billion, or 4.6%.

  • China is by far the largest contributor to the overall U.S. trade deficit in goods, accounting for 31.8% of our $702.3 billion deficit so far this year.

  • In 2007, the United States ran a $256.2 billion goods deficit with China or 32.2% or our total $794.5 billion goods trade deficit.

The United States has lost 3.9 million manufacturing jobs since 2000.

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