US files new WTO case against China over export subsidies

Article by Anita Panait, on September 19, 2012

The United States government has filed a new trade case against Chinese auto and auto-part export subsidies that endanger jobs in Ohio and key states that would most likely be the key to the upcoming 2012 presidential election. In a statement, U.S. Trade Representative Ron Kirk said that export subsidies are prohibited under the rules of the World Trade Organization because they are unfair and severely distort international trade.

He noted that China expressly agreed to cancel all export subsidies when it entered the WTO in 2001. The U.S. Trade Representative's office added it was taking the next step in another WTO case filed this year against Chinese duties on U.S. auto exports.

The office’s request will be made at the WTO’s next Dispute Settlement Body meeting on Sept. 28, 2012. The trade case is prompted by a July 5, 2012 complaint filed by Obama administration, alleging that China imposed unfair levies on $3.3 billion of U.S. vehicle exports, mostly by GM and Chrysler.

The trade case filing was made on the same day that Obama started a bus tour of Ohio and Pennsylvania. Hours after the U.S. filed the trade case, China responded by filing a complaint at the WTO to dispute a new U.S. law on "countervailing duties," or tariffs intended to counter export-promoting subsidies on products including tires and steel.

In a speech in front of 4,500 supporters in Cincinnati, Ohio -- considered as a crucial swing state since one in eight jobs there is connected to the auto industry -- President Obama said Mitt Romney has claimed he would “take the fight to China,” even though, as a private equity executive, he “made money investing in companies that uprooted from here and went to China.” Obama remarked that Ohio could not stand up to China if all that the state has done is sending jobs to the Asian country.

Topics: china

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