China is the United States top trading partner, but with that also requires a commitment to abide by the same trade rules. As such, the United States Trade Representative has announced it is pursuing dispute settlement consultations with China at the World Trade Organization over its export subsidy programs.
The United States previously brought a WTO challenge to what appear to be prohibited subsidies that China provides for auto and auto parts manufacturers. However, through that process, USTR developed information and concern that China had provided export subsidies to many other industries including agriculture and textiles.
Secretary of Agriculture Tom Vilsack testified before House Agriculture Committee members saying that it was “clear” that China has “not been playing by the rules in a number of areas” with cotton reserves being one of those areas.
It’s been suggested to have a strategic dialogue with China on biotechnology regulatory processes as well as exports subsidies which the country utilizes to control markets, Vilsack said. He expects talks to begin yet this spring.
“We want a science-based and rules-based system,” Vilsack said, which has not been the norm for the trade between the two countries. “We’re calling them out, and we should.”
“China needs to engage in ‘above the board’ trading practices with the United States to increase market access for their products and ours,” noted Rep. Jim Costa (D., Calif.). “The Chinese market represents the third largest trading partner for California agriculture at roughly $1.4 billion. The export subsidies sponsored by the Chinese government for fruits, vegetables, and poultry will have a significant effect on California’s trade. That is why this challenge brought by the USTR is so important.”
Rep. Charles Boustany (R., La.) said that unfairly subsidized shrimp imports threaten the historic Gulf shrimp industry that supports thousands of Louisiana families. “I'll continue working with the Office of the U.S. Trade Representative to protect these jobs that are vital part of Louisiana’s economy and culture.”
Consultations are the first step in the WTO dispute settlement process. If the United States and China are not able to reach a mutually agreed solution through consultations, the United States may request the establishment of a WTO dispute settlement panel.