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US 'violating WTO rules'

By Song Shengxia (Global Times)

08:22, May 25, 2012

China's Ministry of Commerce (MOFCOM) said yesterday that the US provided unfair government support and subsidies to its renewable energy companies, violating World Trade Organization rules and creating barriers to trade.

Six renewable energy programs concerning wind, solar and power generation industries in five US states violated the WTO Agreement on Subsidies and Countervailing Measures and the General Agreement on Tariffs and Trade (GATT) 1994, the predecessor of the WTO, and distorted normal trade, the ministry said in a statement on its website.

The subsidies or refunds by the the five states to the energy companies or users with budget ranging from $100,000 to $137 million are prohibited subsidies under the WTO subsidies agreement, and violate the regulations on national treatment under the GATT provisions, the ministry said in a separate document attached to the statement.

The six programs are Renewable Energy Cost Recovery Incentive Program of the state of Washington, Commonwealth Solar II program of Massachusetts, Ohio Wind Production and Manufacturing Incentive Program, Renewable Energy Incentive Program and Renewable Energy Manufacturer's Incentive Program of New Jersey and Self-Generation Incentive Program of California.

The ministry did not say in the statement whether it would take any measures against the US trade violations it had uncovered. Normally, the China Bureau of Industry Injury Investigation under MOFCOM would announce duties on product imports in question following the ministry's initial ruling.

The China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) as well as the China New Energy Chamber of Commerce (CNECC) under the All-China Federation of Industry & Commerce filed a petition related to the US measures last November.

"The US government's subsidies to its energy equipment manufacturers have greatly affected China's domestic manufacturers," Wang Yuehai, executive secretary-general of the CNECC, told the Global Times.

According to Wang, the value of multicrystal silicon China imported from the US reached $2 billion in 2011 while photovoltaic solar equipment imports from US reached $3 billion.

"We hope the US government can abandon its short-sighted view, rationally judge the current situation of the development of new energy and reconsider its decision on imposing duties on China's solar panel imports to avoid further trade tensions," Wang said.

"The ministry's statement shows that the US government does subsidize its new energy sectors. All countries in the world are subsidizing their new energy sectors, and the US gives much more subsidies to the sectors than other countries in the world because it wants to reach the commanding height of the industry," Zhou Shijian, an international trade law expert at Tsinghua University, told the Global Times.

"The WTO rules are 'sword' and 'shield' at the same time. Today's statement reminds Chinese companies that they can also use rules to take action against the imports from the US which harm their interest," he said.

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