US seeks WTO action on China, India subsidies

US Trade Representative Ron Kirk
© AFP/Getty Images/File Alex Wong

WASHINGTON (AFP) – The United States said Thursday it has enlisted the World Trade Organization to obtain detailed information on subsidy programs in China and India.

US Trade Representative Ron Kirk said that Washington had submitted information to the WTO identifying nearly 200 subsidy programs that China has failed to notify as required under WTO rules, as well as information on 50 subsidy programs in India not previously notified.

The United States is seeking the “prompt provision of detailed information and data from China and India” regarding the operation of these subsidy programs, Kirk said in a statement.

Under WTO rules, every member is obliged to notify the Geneva-based trade body of its subsidy programs “in a timely fashion.”

China, since becoming a WTO member in December 2001, has submitted only one subsidies notification — more than five years ago and “noticeably incomplete” for the period from 2001 to 2004, the top US trade envoy said.

Since then, the US said, China has undertaken numerous subsidy programs, including subsidies for green technology and income tax exemption for investment in domestic “technological renovation.”

Earlier in 2011, India submitted its first notification in nearly 10 years, but it covered only three subsidy programs, the USTR said.

India has failed to notify the WTO about subsidies for shipbuilding, steel development and software, among others, the trade envoy said.

Kirk said that Washington provided the WTO with information on the Chinese and Indian subsidy programs gathered in investigations it conducted in cooperation with the US Department of Commerce.

“The situation was simply intolerable,” Kirk said.

“Because China and India have failed to meet their respective obligations, we had to act — as we are entitled to under the WTO rules — and provide the voluminous information we have developed regarding subsidy programs in these two countries.”

Kirk said the notification obligation was particularly significant for WTO members like China, saying inadequate transparency in many areas of the Asian powerhouse places a “tremendous burden” on other WTO members.

“The lack of transparency severely constrains the ability of WTO members to ensure that each government is playing by the rules. The United States would have preferred to avoid today’s filings but we have done so to hold China and India accountable and to enforce the rules that all WTO members must follow.”