A statement from National Association of Manufacturers President John Engler on the announcement that China will be eliminating trade-distorting subsidies:
This shows clearly that the WTO system works. The announcement today by U.S. Trade Representative Susan Schwab of an agreement signed by the United States and China settles a case that was filed in the WTO in February of this year. The case claimed that China was maintaining a number of subsidy programs across a wide range of industrial goods in violation of its WTO obligations.
The NAM has been the lead organization calling for an end to two of China’s most trade-distorting practices – undervaluing its currency and subsidizing its industries. These WTO-illegal subsidies favored Chinese goods over imports in the domestic market and resulted in export prices that were lower than market value. We strongly supported the Administration’s filing this WTO case earlier this year.
The settlement of this case is great news. China is to be commended for recognizing that these subsidies were illegal and for acting responsibly to eliminate them without going through prolonged litigation. We hope this is a harbinger of things to come.
The Administration has been on the forefront of negotiations to end unfair trade practices by U.S. trading partners, among them China. We support their policy of engagement first and use of legal action within the global rules-based system when necessary. Resolution of this case helps respond to widespread concern that trade is unfair and shows that the system does work.
We congratulate Ambassador Schwab and her team at USTR for their tireless efforts to achieve this settlement with China. It is a victory for the global trading system.
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