Bush administration stokes trade tensions with China

The US trade representative Susan Schwab filed a formal complaint with the WTO, accusing Beijing of using “its basic tax laws and other tools to encourage exports and to discriminate against imports of a variety of American manufactured goods”. She claimed that Chinese subsidies had “denied an opportunity [for US firms] to compete fairly in the United States and in third country markets”.

This is the third time that the US has taken a case to the WTO since China joined the body in December 2001. However, unlike previous cases that targetted specific categories of Chinese goods, the latest US action alleges “illegal” subsidies across a wide spectrum of Chinese products, from steel and paper to information technology. Some 55 percent of Chinese exports to the US could be affected.

Beijing has 60 days to reach a negotiated settlement with Washington or the WTO will set up a panel to arbitrate the dispute. If it loses, China would have to remove the subsidies or face US trade penalties. The process of WTO consultation can, however, be lengthy. The US, EU and Canada filed a joint compliant last March against China’s policy of restricting the import of foreign-made car parts, but a ruling has not been made.

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http://wsws.org/articles/2007/feb2007/chin-f07.shtml