U.S. Hauls China To WTO Over Illegal Subsidies

Cites industrial subsidies as cause of action.

The U.S. government on Feb. 2 signaled a sharp escalation in its trade frictions with China by filing a WTO action against the fast-growing Asian economy over "illegal" industrial subsidies. "Our decision to bring this case to the WTO comes after our efforts at dialogue failed," U.S. Trade Representative Susan Schwab said.

"The case is important because we are seeking to level the playing field to allow US manufacturers to compete fairly with Chinese firms," she said.

The USTR office said it was seeking formal dispute settlement from the WTO to remedy tax and other tools allegedly used by China "to encourage exports and to discriminate against imports of a variety of American manufactured goods." State subsidies for steel, paper, information technology and other industries allow China to export its goods on the cheap and therefore prevents U.S. companies from competing fairly, both at home and in third world markets, it said.

"This case is about standing up for America's workers and manufacturers," Schwab said.The case is only the third time that the U.S. is taking China to the Geneva-based arbiter of global trade since the Asian powerhouse joined the World Trade Organization in 2001.

Last week, 23 U.S. senators told Commerce to go ahead with special duties on imports from China, which they claimed were heavily subsidized by the state and were hurting U.S. manufacturers and workers.

Copyright Agence France-Presse, 2007

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