China calls US WTO case on subsidies 'a pity'

Beijing said on Saturday it was "a pity" that the United States had sought World Trade Organisation involvement in a dispute over China's industrial subsidies. Quoting a spokesman for the Chinese Ministry of Commerce, the official Xinhua news agency said the two countries had maintained bilateral contact over the issue all along.
Washington said on Friday it had launched a WTO case after negotiations had failed to eliminate Chinese government subsidies for steel, computers, clothing and many other industries. "We are seeking to level the playing field to allow US manufacturers to compete fairly with Chinese firms," US Trade Representative Susan Schwab said. Washington began legal action at the WTO "after our efforts at dialogue failed," Schwab told reporters.
Despite an obligation to abandon a long list of "prohibited subsidies" when it joined the WTO in 2001, "China has taken no action to eliminate them," Schwab said. The Xinhua report, which did not name the spokesman or quote him directly, said Beijing was deliberating over the US position.
Schwab said that despite an obligation to abandon a long list of "prohibited subsidies" when it joined the WTO in 2001, "China has taken no action to eliminate them". US trade officials said the United States was targeting six Chinese export subsidy programmes, which cover up to 60 percent of China's exports, and three other programmes they said discriminated against imports by subsidising Chinese company purchases of domestic goods.
The first step, taken on Friday, was a request for formal consultations under WTO rules. If that fails to resolve the dispute in the next 60 days, the United States can ask for a WTO panel to hear its complaint.
Senior Democrats welcomed the action as long overdue and said it needed to be followed by even more cases at the WTO to help rein in the huge US trade deficit, which is expected to have reached a record of about $760 billion in 2006.
A huge chunk of the trade gap - or about $230 billion - is with China alone, and many lawmakers and manufacturers believe Chinese government subsidies are to blame. "This case represents a step in the right direction, but it must be part of a much more aggressive program to take actions against violations of WTO obligations," said Rep. Sander Levin, a Michigan Democrat who chairs the Ways and Means trade subcommittee in the US House of Representatives.