China drops certain wind turbine subsidies

China drops certain wind turbine subsidies    China has ended certain wind power equipment subsidies, which the United States recently challenged through the World Trade Organization.
   In specific, the United States through the WTO sought to end China's Special Fund for Wind Power Equipment Manufacturing subsidies, following its own investigation initiated on Oct. 15, 2010 in response to a United Steelworkers petition.
   The subsidies took the form of grants to Chinese wind turbine manufacturers that agreed to use key parts and components made in China rather than purchasing imports. The United States estimated the grants provided to Chinese companies since 2008 could have totaled several hundred million dollars. The size of the individual grants ranged between $6.7 million and $22.5 million.

Kirk

   'Subsidies requiring the use of local content are particularly harmful and are expressly prohibited under WTO rules,' said U.S. Trade Representative Ron Kirk in a statement on Tuesday. 'We challenged these subsidies so that American manufacturers can produce wind turbine components here in the United States and sell them in China.'
   This is the third successful WTO challenge that the United States has brought against Chinese government subsidies. In 2007, the United States and Mexico challenged several tax-related subsidies that benefited a wide cross-section of China's manufactured goods, claiming that those subsidies illegally supported Chinese-made goods and discouraged the purchase of imports from the United States. In 2008, the United States, Mexico and Guatemala challenged as illegal a Chinese government industrial policy that generated a vast number of subsidy programs that promoted worldwide sales of famous Chinese brands. In each of these cases, following formal consultations at the WTO, China agreed to eliminate the subsidies that the United States had challenged.
   Under WTO rules, China is obligated to submit information about all of its subsidy programs on a regular basis. This information is required of all WTO members so that countries may assess the nature and extent of subsidy programs. Despite this obligation, China never notified the WTO of the wind power equipment subsidies challenged in this WTO dispute, according to the Office of the U.S. Trade Representative.
   Similarly, China failed to submit notifications about dozens of subsidies challenged in the two prior disputes. The country has submitted only one subsidies notification since becoming a WTO member in December 2001. 'That notification took place more than five years ago and was noticeably incomplete,' USTR said.
   The obligations of WTO members to submit notifications about their subsidies are outlined in Article 25 of the WTO's Agreement on Subsidies and Countervailing Measures.
   'This lack of transparency hinders the efforts of WTO members to collectively ensure that each government is playing by the rules,' Kirk said.
   'The United States would prefer not to resort to WTO challenges, but we will do so to hold China accountable and to enforce the rules on illegal subsidies,' he said. 'Even as we announce our success in this dispute, it is past time for China to be transparent about its subsidy programs, and that includes meeting its notification obligations like other WTO members. China is the second largest trader at the WTO, and it is simply not acceptable that China continues to evade its transparency commitments.' ' Chris Gillis