WASHINGTON: Bowing to American pressure on the eve of high-level talks to reduce economic tensions, China agreed Thursday to terminate a dozen different subsidies that promote exports and discourage imports of steel, wood products, information technology equipment and other manufactured goods.
The Chinese actions affect exports by companies that have foreign investments or are joint ventures with foreign companies. Nearly 60 percent of Chinese exports are produced by these businesses.
U.S. Trade Representative Susan Schwab’s statement is here.
This outcome represents a victory for U.S. manufacturers, producers and their workers. It is significant in three respects. First, it eliminates a set of widely- available subsidies that create significant disadvantages for U.S. products across many manufacturing sectors. Second, it shows that Chinese policymakers understand the need to respect the strict WTO prohibitions on these kinds of subsidies in the future. It also demonstrates that our two nations can work together to resolve major differences. Third, it shows that President Bush’s approach to resolving trade disputes with China – dialogue if possible, legal action when necessary, and working within the rules-based system – gets real results.
Yes, yes and yes.
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