WASHINGTON – After 15 years of negotiations, China joined the World Trade Organization in late 2001. In so doing, it agreed to eliminate its export subsidies on agricultural products. 14 years later, China still hasn’t eliminated them, nor has it even given the WTO a complete list of its export subsidies, which was another stipulation of membership.
“I think we’re calling them out, and we should,” said USDA Secretary Tom Vilsack in an update before the House Ag Committee Wednesday. He applauded recent action on the matter by U.S. Trade Representative Michael Froman, whose office is now pursuing settlement consultations with China through the WTO.
“It’s fairly clear that they have been not necessarily playing by the rules in a number of areas,” Vilsack explained. “I’m very pleased with the USTR’s announcement of additional actions taken potentially against China, to try and get them to play by the rules. It’s extremely important.”
However Vilsack also pointed out that proceeding on the issue will require a delicate touch. “They are our number-one customer,” he added, “and so it’s obvious that we have to be sensitive to that, but that the same time, we want a science-based and rules-based system, because if everyone plays fair, we’ll do just fine in that system. If we’re at a disadvantage, obviously, that’s a problem.”
The issue is now coming to light due to a lack of transparency in China over what it calls its “Demonstration Bases-Common Service Platform.” In September of 2012, the US began a WTO dispute settlement case with China over export subsidies on automobile parts; that investigation yielded information suggesting Chinese subsidies extended into other sectors, such as agricultural exports.
Pursuant to WTO procedure, the U.S. and China will hold consultations first, and if the matter is unresolved, will request the establishment of a WTO dispute settlement panel to decide the issue.
To hear more about efforts to bring China’s trade policy in line with its obligations as a member of the World Trade Organization, click the audio player above this story.