U.S. Trade Representative Ron Kirk announced that the United States has submitted information to the World Trade Organization (WTO) identifying nearly 200 subsidy programs that China has failed to notify as required under WTO rules. Information was also submitted on 50 subsidy programs in India not previously notified. Through these actions at the WTO, the United States is seeking the prompt provision of detailed information and data from China and India regarding the operation of these subsidy programs.
“The situation was simply intolerable,” said Ambassador Kirk. “Every member of the WTO is required to come clean on its subsidy programs on a regular basis. China has not notified its subsidy programs in over five years. India only recently filed its first notification in almost ten years, and even then notified only three of the many subsidy programs we know to exist. 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.”
Under WTO rules, every Member is obligated to submit information about all of its subsidy programs on a regular basis. This information is required so that Members may assess the nature and extent of the subsidy programs of others. The notification obligation is particularly significant for Members like China, where inadequate transparency in so many areas places a tremendous burden on other WTO Members seeking to better understand China’s trade policy measures. China 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. In the last ten years, India has submitted only one notification, which was also noticeably incomplete. Previously, over the course of numerous meetings of the WTO Subsidies Committee, the United States has requested that China and India make full notifications of all of their subsidy programs.
“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. It is past time for China and India to be transparent about their subsidy programs, and that includes meeting their notification obligations like other WTO Members. China and India are among the largest exporters in the WTO, and it is simply not acceptable that they continue to evade their transparency commitments,” Ambassador Kirk said.
The obligations of WTO Members to notify their subsidies are set forth in Article 25 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement). Under Article 25.10 of the SCM Agreement, if a Member has not notified its subsidy programs in a timely fashion, another Member can raise the issue with the subsidizing Member. If the programs are not subsequently notified, the complaining Member can bring the matter to the attention of the WTO Subsidies Committee. An action taken under Article 25.10 is referred to as a “counter notification.”
In 2006, China submitted its only notification since becoming a WTO Member in 2001, covering the years 2001- 2004. Earlier this year, India submitted its first notification in nearly ten years, but it covered only three subsidy programs.
USTR worked closely with the U.S. Department of Commerce in investigating China’s and India’s subsidies practices and in compiling the Article 25.10 counter notifications. The U.S. submission on China’s subsidy programs includes measures submitted in the context of an investigation initiated under section 302(a) of the Trade Act of 1974, as amended, on 15 October 2010, regarding Chinese policies and practices affecting trade and investment in green technologies. It also includes measures uncovered in the course of three prior WTO dispute settlement proceedings and measures uncovered in the course of countervailing duty investigations conducted by the U.S. Department of Commerce. The U.S. submission on India’s subsidy programs includes measures uncovered in the course of U.S. countervailing duty investigations.