United States Launches Challenge to Extensive Chinese Export Subsidy Program

United States Trade Representative Michael Froman announced today that the United States has pursued dispute settlement consultations with the Government of China at the World Trade Organization ("WTO") concerning China’s "Demonstration Bases-Common Service Platform" export subsidy program. Under this questionable program, China seems to provide prohibited export subsidies through "Common Service Platforms" to manufacturers and producers across seven economic sectors and dozens of sub-sectors located in more than one hundred and fifty industrial clusters throughout China known as "Demonstration Bases." This unfair Chinese program is harmful to American workers and American businesses of all sizes.

Pursuant to the Demonstration Bases-Common Service Platform program, China provides free and discounted services through "Common Service Platforms" as well as cash grants and other incentives to enterprises that meet export performance criteria and are located in 179 Demonstration Bases throughout China. Each of these Demonstration Bases is comprised of enterprises from one of seven sectors:

1. textiles, apparel and footwear;
2. advanced materials and metals (including specialty steel, titanium and aluminum products);
3. light industry;
4. specialty chemicals;
5. medical products;
6. hardware and building materials; and
7. agriculture.

China maintains and operates this extensive program through over 150 central government and sub-central government measures throughout China.

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.