The United States initiated consultations at the World Trade Organization over China’s export subsidy system, announced U.S. Trade Representative Michael Froman. Consultations are the first step at WTO. If nations cannot reach agreement, the next step would be a request for a WTO panel to decide if trade rules are being violated. Agriculture is one of the seven areas identified by the United States as potentially getting unfair assistance.
At issue is China’s “Demonstration Bases-Common Service Platforms” that the United States says appears to provide prohibited export subsidies in the form of free and discounted services, as well as cash grants and other incentives to manufacturers and producers in 150 locations. Agriculture Secretary Tom Vilsack said he was “heartened” by Froman’s announcement and pointed to USDA concerns about how China handles its vast stockpile of cotton and its unclear practices in setting domestic cotton prices.