US Wins Challenge Against China's Wind Power Equipement Subsidies Dispute With WTO
According to U.S. Trade Representative Ron Kirk, the United States has succeeded in making China end certain wind power equipment subsidies, after the United Steelworkers’ filed a petition to investigate China. After investigating, the U.S. challenged the Special Fund for Wind Power Equipment Manufacturing (Special Fund) subsidies at the World Trade Organization (WTO), finding that the subsidies “took the form of grants to Chinese wind turbine manufacturers that agreed to use key parts and components made in China rather than purchasing imports. The United States estimated that the grants provided to Chinese companies since 2008 could have totaled several hundred million dollars. The size of the individual grants ranged between $6.7 million and $22.5 million,” according to the USTR report.
This success marks the third time since 2007 that the U.S. has ended problematic subsidies in WTO disputes against China.
“The United States is pleased that China has shut down this subsidy program. Subsidies requiring the use of local content are particularly harmful and are expressly prohibited under WTO rules. This outcome helps ensure fairness for American clean technology innovators and workers. We challenged these subsidies so that American manufacturers can produce wind turbine components here in the United States and sell them in China. That supports well-paying jobs here at home,” said Ambassador Kirk.
Apparently this investigation has been difficult for the U.S. as China had never notified the WTO about the disputed subsidies, even though China was obligated to submit this information according to the SCM Agreement. In fact, China has only submitted one subsidy notification since 2001.
Ambassador Kirk said that “The United States would prefer not to resort to WTO challenges but we will do so to hold China accountable and to enforce the rules on illegal subsidies. Even as we announce our success in this dispute, it is past time for China to be transparent about its subsidy programs, and that includes meeting its notification obligations like other WTO Members. China is the second largest trader at the WTO, and it is simply not acceptable that China continues to evade its transparency commitments.”