GENEVA — The U.S. locked horns with China last week, charging that country has not given a full accounting of the government support extended to industries and appears to subsidize apparel and textile exporters.
Backed by the European Union, Japan and Turkey, the U.S. confronted China on the issue during a session of the World Trade Organization’s Committee on Subsidies & Countervailing Measures.
“The United States has specific information on subcentral government-level subsidy programs that appear to be export-contingent and only available to textile and apparel exporters,” the U.S. said in a written presentation submitted in advance of Thursday’s meeting. “How does the central government monitor provincial and local government policies targeting textiles and apparel exporters to ensure compliance with China’s WTO obligations?”
The U.S. cited a statement by China that said: “The government has no policy whatsoever that provides direct subsidy to textile and apparel companies.”
The U.S. also asked why China would provide new funds to encourage apparel textile exports.
In response, China said it had not initiated any new export subsidies for textiles, according to trade officials. Instead, the government is setting up a special fund to encourage technical innovation and upgrading of the sector in response to unfair treatment faced by Chinese exporters.
But the U.S. countered that China’s textile and apparel industry does not need a new fund as it is already highly competitive and added that it continues to be concerned about China’s loan policies in the banking sector.
China said banks are now operating on commercial terms and stated the government no longer pursues a credit policy favoring certain sectors.