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China agrees to abide by WTO rules on export subsidies

(Xinhua)
Updated: 2008-12-21 22:00

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China will work under World Trade Organization (WTO) rules to settle disputes with the United States and Mexico over a complaint that China was using export subsidies, the Ministry of Commerce said Sunday.

In a brief statement posted on its website, the Ministry of Commerce said China has abided by the WTO rules and rejected trade protectionism.

"On the US and Mexican request of dispute settlement consultations through the WTO, the Chinese side will deal with it according to WTO rules," it said.

On Friday, the United States, along with Mexico, filed a complaint at the WTO, claiming that China was using subsidies to boost exports.

"We were disturbed to find that China still appears to be using WTO-illegal measures to promote exports, ranging from textiles and refrigerator to beer and peanuts," US Trade Representative Susan Schwab said in a statement.

Under WTO procedures, if the dispute settlement consultations do not lead to a resolution in 60 days, the countries can request a WTO dispute settlement panel.

The US and Mexico had filed a similar case early last year, alleging that China was using tax breaks and other incentives to subsidize its exports, which violated WTO regulations.

Following failed consultations between the three sides, a WTO panel was established last August to investigate.

Three months later, the three countries reached an understanding through continued discussions, sparing a WTO panel ruling.