US-China Ink “Out of WTO” Deal over Subsidy to Settle Dispute

Washington and Beijing have reached a deal in their dispute (DS489) over China’s allegedly export-contingent subsidy programme, according to the Office of the US Trade Representative (USTR).

The news, announced on Thursday 14 April, comes over a year after the US filed a WTO complaint challenging the “Demonstration Bases-Common Service Platform” programme. At the time, the US claimed that these were tantamount to export subsidies, which are prohibited under global trade rules.

While a dispute panel was established in April 2015 to hear the case, talks between the two sides continued in an effort to find a mutually acceptable solution, according to US officials. The WTO website notes that while the DSB has agreed to create a panel, the panellists have not yet been chosen.

The Office of the USTR has also released a copy of the “memorandum of understanding” reached by the two trading giants, as well as a table outlining the various “instruments” that had been challenged in the original case, with updates on their individual statuses.

From agriculture to textiles

The dispute had specifically targeted demonstration bases – in other words, clusters of enterprises – which the US claimed were eligible for incentives should they fulfil certain export-related criteria.