China regrets US plan to move WTO over sops

BEIJING: China has said it regrets a US decision to haul Beijing before the World Trade Organisation (WTO) over its industrial subsidies, calling Washington���s move a ���pity���. ���It���s a pity for the US to seek (the) consultation process at the World Trade Organisation,��� a Chinese commerce ministry spokesman said late Saturday, according to the state-run Xinhua news agency. The spokesman said authorities in Beijing would be ���deliberating��� the US case, adding that the two sides had ���kept bilateral contact over the issue all along���.

The US filed its complaint with the Geneva-based trade body on Friday, with US Trade Representative Susan Schwab saying the time for negotiations had been ���exhausted���. Her office said tax breaks and tariff exemptions encourage Chinese companies to buy Chinese-made equipment rather than imports, while financial incentives help firms to export their goods. State subsidies for steel, paper, information technology and other industries allow China to export its goods on the cheap and so prevent US companies from competing fairly, both at home and in third markets, it said.

The US action triggers formal consultations between Washington and Beijing at the WTO. If those consultations fail to resolve the matter within 60 days, as is likely, Washington can appeal to a WTO dispute settlement panel. It is the third time that the US has taken China before the WTO since Beijing joined the organisation in 2001, but is the first case to cover such a wide array of complaints.

���The US believes that China uses its basic tax laws and other tools to encourage exports and to discriminate against imports of a variety of American manufactured goods,��� US trade representative Susan Schwab said. The Bush administration signalled it was preparing to bring a case against China at the Geneva-based WTO last December when treasury secretary Henry Paulson led a delegation of government officials and business executives to Beijing for economic talks.

���The export subsidies give an unfair competitive advantage to Chinese products when they are exported,��� Ms Schwab said. ���That means a range of domestically produced goods in the US, from steel to paper to computers, are denied an opportunity to compete fairly in the US and in third country markets where they are up against subsidised imports from China.���