Dispute Settlement DS387

21/05/2013 12:00 - 909 Views

China — Grants, Loans and Other Incentives

Short title:
Complainant:	United States
Respondent:	China
Third Parties:
Agreements cited: (as cited in request for consultations)	Agriculture: Art. 3, 9, 10 GATT 1994: Art. III:4 Subsidies and Countervailing Measures: Art. 3 Protocol of Accession: Part I, para. 1.2, Part I, para. 12.1
Request for Consultationsreceived:	19 December 2008

Consultations

Complaint by the United States.

On 19 December 2008, the United States requested consultations with China with regard to certain measures offering grants, loans and other incentives to enterprises in China. The United States indicated that these grants, loans and other incentives are reflected in a number of measures, as well as in any amendments or any related or implementing measures, including measures relating to the China World Top Brand Programme and the Chinese Famous Export Brand Programme.

The United States considers that these measures appear to provide grants, loans, and other incentives to enterprises in China on the condition that those enterprises meet certain export performance criteria. Accordingly, the measures appear to be inconsistent with Article 3 of the SCM Agreement. Additionally, to the extent that these measures provide subsidies for agricultural products, they appear to be inconsistent with Articles 3, 9, and 10 of the Agreement on Agriculture. The measures also appear to be inconsistent with China's obligations under paragraph 12.1 of Part I of its Accession Protocol, as well as paragraph 1.2 of Part I of its Accession Protocol (to the extent that it incorporates paragraph 234 of the Report of the Working Party on the Accession of China), which forms part of the terms of accession agreed between China and the WTO and is an integral part of the WTO Agreement. Finally, the grants, loans, and other incentives appear to be inconsistent with Article III:4 of the GATT 1994 to the extent that the measures benefit Chinese-origin products but not imported products.

On 15 January 2009, Canada, the European Communities, Mexico and Turkey requested to join the consultations. On 16 January 2009, Australia and Colombia requested to join the consultations. On 19 January 2009, Ecuador, Guatemala and New Zealand requested to join the consultations. Subsequently, China informed the DSB that it had accepted the requests of Australia, Canada, Colombia, Ecuador, the European Communities, Guatemala, Mexico, New Zealand and Turkey to join the consultations.