GENEVA — China has responded to claims by the U.S. and Mexico that it provided companies with subsidies prohibited under global rules, including exemptions from taxes and other payments and the granting of refunds.
In a statement issued after closed-door dispute resolution consultations here, China said the complaining nations “have misunderstandings toward Chinese foreign investment and taxation regimes.” China said some subsidy programs concerning preferential loans for exporters “do not exist or apply anymore.”
U.S. Trade Representative Susan Schwab, in filing a World Trade Organization case against China on Feb. 2, said companies targeted for many of the subsidies accounted for almost 60 percent of China’s manufactured goods in 2005. China’s exports have increased 260 percent since it joined the WTO in 2001, U.S. data shows.
U.S. officials characterized this week’s talks as cordial, but also noted that the U.S. expects China to abide by the commitments it made when it became a member of the WTO.
Under the WTO dispute resolution mechanism, the U.S., Mexico and China have 60 days to resolve their difference through consultations, and a request can be made to establish a WTO dispute panel to examine the complaint. U.S. officials declined to comment if another round of consultations would be held.
A senior Chinese official, who spoke on the condition of nonattribution, said, “The ball is in the complainants’ camp and it’s up to them to decide how to proceed.”