Wednesday, February 11, 2015

• White House to File Trade Case Against China at W.T.O. Over Export Subsidies By KEITH BRADSHER

An employee at a textile factory in Wuhan, China. The United States contends that China's textile industry has benefited from illegal export subsidies.

HONG KONG — The Obama administration announced on Wednesday morning that it was filing a broad trade case against China at the World Trade Organization, accusing Beijing of providing illegal export subsidies in seven different industries.

The trade case comes as the White House is trying to persuade Congress that it is taking a tough stand in trade negotiations. 

The administration wants Congress to give it the power to negotiate a Trans-Pacific Partnership lowering trade barriers and adding a range of measures protecting patents and other forms of intellectual property across a dozen Pacific nations, and to be able to submit the agreement to Congress for a yes-or-no vote with no amendments allowed.

The reported Chinese subsidies affect American industries with powerful political constituencies on Capitol Hill, and with links to fence-sitters in Congress whose support the administration needs to win the trade negotiating authority it seeks. 

These industries include textiles, apparel, agriculture, chemicals, medical equipment and certain metals like titanium and specialty steels.

The administration accused China of providing at least $1 billion in illegal subsidies over three years by providing so-called common service platforms to help exporters.
The administration is also contending that China set up 179 “demonstration bases” for exporters in these industries, providing at least $635,000 at each of some of the bases.
If the administration wins its cases, China would need to halt the subsidies. 

W.T.O. rules ban virtually all export subsidies so as to discourage member nations from trying to buying market share for their companies in other countries.

The administration’s announcement came late at night in China, and there was no immediate reaction from Beijing.
China’s commerce ministry sometimes waits a day or two to issue a public response to W.T.O. cases, preferring to have teams of lawyers study them before saying anything.

Wednesday’s announcement came the morning after President Obama and Xi Jinpingspoke on the phone and agreed that Xi would visit Washington in September.
According to a White House statement, the two presidents discussed climate change, Iran’s nuclear program and China’s currency policy. 

The statement made no mention of trade.
Asked whether President Obama personally warned Mr. Xi of the coming trade case, an American trade official responded only that “the Chinese were notified ahead of time through senior channels.” The official spoke on condition of anonymity because of the diplomatic sensitivities involved.
The specific legal measure taken by the administration on Wednesday is a formal request to China for consultations at the W.T.O. 

Unless those consultations produce a mutually acceptable agreement — and such talks seldom do — the next step for the United States would be to request that a dispute resolution panel be convened at the W.T.O. in Geneva to rule on which country is right.

The scale of the alleged subsidies is small compared with China’s overall exports of goods to the United States, which reached $466.7 billion last year. 

American exports to China, by comparison, totaled $124 billion last year, the Commerce Department announced on Feb. 5.