United States Trade Representative Michael Froman. (Photo: USTR)
UNITED STATESMonday, February 16, 2015, 03:00 (GMT + 9)
The US Trade Representative (USTR) office will start consultations with the Chinese government at the World Trade Organization (WTO) to address China’s billion-dollar subsidies with which the Asian giant supports the export of products ranging from steel to shrimps.
USTR’s Michael Froman said Chinese companies, through designated centres of export, benefitted from free or subsidized services, cash grants and other incentives, which gave their products an unfair advantage.
The office estimated the centres received more than USD1 billion from the Chinese government over three years, and some companies received at least USD 635,000 in support annually.
China is the largest producer of farmed shrimp in the world, and according to theSouthern Shrimp Alliance (SSA), significant quantities of dumped, contaminated Chinese shrimp continue to enter the U.S. market through fraudulent country-of-origin claims. These imports weaken the price structure of the U.S. shrimp market and consumer trust in the shrimp Americans are consuming.
The SSA states that the ongoing development of aquaculture and shrimp production in China threatens the profitability of the US shrimp industry. Thus, the USTR’s announcement gives some hope that the Chinese government will be stopped from further raise its capacity in the production of farmed shrimp.
On Thursday, the Ministry of Commerce of China defended its policy of export subsidies, which it described as "significant steps" to promote healthy and stable trade.
The Chinese government regretted the US measure of submitting a request before the WTO, and said it would appropriately handle the case according to the international organization's procedures.
Chin Leng Lim, a law professor at the University of Hong Kong, pointed out that the use of anti-subsidy action seemed to be as the new trade weapon of choice of the US.
"When the allegation is unfair subsidization, you've got to remember that you're not just going after companies abroad for behaving unfairly. You're going after an entire foreign economy for being run differently," he stressed, Reuters informed.