US drags India, China to WTO over subsidy programmes

The United States on Thursday dragged China and India to the World Trade Organisation over subsidy programmes implemented by the world's two fastest growing economies, with a top Obama Administration official terming the situation as intolerable.

"The situation was simply intolerable," US Trade Representative Ron Kirk said.

Noting that every member of the WTO is required to come clean on their subsidy programmes on a regular basis, Kirk said China has not notified its subsidy programmes in over five years.

"India only recently filed its first notification in almost ten years and even then, notified only three of the many subsidy programmes we know to exist," he said.

"Because China and India have failed to meet their respective obligations, we had to act -- as we are entitled to under the WTO rules -- and provide the voluminous information we have developed regarding subsidy programmes in these two countries," he said.

Kirk announced that the US has submitted information to the WTO identifying nearly 200 subsidy programmes that China has failed to notify as per WTO rules.

Information was also submitted on 50 subsidy programmes in India not previously notified, he said. Through these actions at the WTO, the United States is seeking the prompt provision of detailed information and data from China and India regarding the operation of these subsidy programmes, the USTR said.

Under WTO rules, every member is obligated to submit information about all of its subsidy programmes on a regular basis. This information is required so that members may assess the nature and extent of the subsidy programmes of others.

The notification obligation is particularly significant for members like China, where inadequate transparency in so many areas places a tremendous burden on other WTO members seeking to better understand China's trade policy measures, the USTR said.

China has submitted only one subsidy notification since becoming a WTO Member in December, 2001. That notification was noticeably incomplete, it said.

In the last ten years, India has submitted only one notification, which was also noticeably incomplete.

Previously, over the course of numerous meetings of the WTO Subsidies Committee, the United States has requested that China and India make full notifications of all of their subsidy programmes, it said.

Kirk said the lack of transparency severely constrains the ability of WTO members to ensure that each government is playing by the rules.

"The United States would have preferred to avoid today's filings, but we have done so to hold China and India accountable and to enforce the rules that all WTO members must follow," the US Trade Representative said.

"It is past time for China and India to be transparent about their subsidy programmes and that includes meeting their notification obligations like other WTO Members. China and India are among the largest exporters in the WTO and it is simply not acceptable that they continue to evade their transparency commitments," Kirk said.