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US challenges Chinese wind power subsidies at WTO
  • | AFP | December 23, 2010 05:06 PM

The long list of trade disputes between the United States and China lengthened further, as Washington asked the WTO to examine subsidies to the Chinese wind power sector.

Wind power turbines line the hillside in China\'s southwestern Yunnan province.

Just weeks before President Hu Jintao\'s January visit to the United States, the US government said it had asked the World Trade Organization to deal with allegedly illegal subsidies that favor Chinese manufacturing firms.

The United States alleges China offers multi-million-dollar grants to only companies making turbines and other equipment with Chinese parts, a violation of trade rules.

"China appears to provide subsidies that are prohibited under WTO rules," US trade officials said in a statement announcing their request for WTO arbitration.

The request means that representatives from Beijing and Washington will have to discuss a solution within the WTO.

If no agreed solution is found, the United States can ask the World Trade Organization to move toward sanctions.

China\'s commerce ministry was not immediately available for comment.

The claim comes as the two economic superpowers face-off over a range of export issues from tires to beef to currency levels, and amid anger in Washington that its exports are being stiffed.

Obama is expected to press his Chinese counterpart to open the door to more US imports when the two leaders meet in January, a means of bolstering the US recovery and rebalancing global trade flows, which are seen as unfairly favoring Beijing.

"These subsidies effectively operate as a barrier to US exports to China," said US Trade Representative Ron Kirk, vowing Washington\'s was committed to "ensuring a level playing field."

The grants, said to be worth as much as 22.5 million dollars, are part of a vast Chinese effort to become a world-beater in green technology.

Despite heavy US spending to improve its own green energy sector, it is still seen as lagging the emerging giant.

The US move was prompted by a major trade union, which in September accused Beijing of handing out hundreds of billions of dollars in illegal subsidies in a bid to corner the green energy market.

The United Steelworkers (USW) union accused China of blocking access to materials used in green technologies, illegally linking subsidies to export sales, curbing imports and demanding foreign investors hand over technology secrets.

It also accused China of providing more than 216 billion dollars worth of subsidies to green technology makers "more than twice as much as the US spent in the sector and nearly half of the total \'green\' stimulus spent worldwide."

Kirk said the United States would investigate the union\'s other claims, but appeared to rule out imminent action.

"If we are able to develop sufficient evidence to support those allegations and they can be effectively addressed through WTO litigation, we will pursue the enforcement of our rights at the WTO," Kirk said.

Members of Congress from both political parties welcomed the move.

"The United States needs to take a more assertive approach to China\'s mercantilist policies, and the administration\'s action today is a welcome step in the right direction," said senior Democratic Representative Sander Levin.

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