China Agrees to End Export Subsidies

After months of negotiations, China has agreed to put a stop to the export subsidies it has been granting for years to a host of industries, giving them an unfair advantage when competing with other companies around the world.

On April 14, the United States and China signed a memorandum of understanding to end China’s export subsidies distributed to seven manufacturing sectors that included apparel, textiles and footwear; hardware and building materials; light industry and agriculture.

In 2015, the United States filed a challenge with the World Trade Organization over that subsidy.

“We have signed an agreement with China to eliminate export subsidies that the United States challenged because they are prohibited under WTO rules. This is a win for Americans employed in seven diverse sectors that run the gamut from agriculture to textiles to medical products, who will benefit from a more level playing field on which to compete,” said U.S. Trade Representative Michael Froman. “This agreement addresses all elements of the massive and complex export subsidy program.”

The National Council of Textile Organizations (NCTO) applauded the agreement to terminate subsidies under the program called “Demonstration Bases-Common Services Platform.”

“There is no doubt that China’s rise to become the world’s largest exporter of textile and apparel products has been aided by a pervasive series of illegal state-sponsored subsidies,” said Augustine Tantillo, NCTO’s chief executive and president.

The agreement was praised by the American Apparel & Footwear Association. “AAFA is pleased to see that the United States and China were able to resolve the long-standing dispute over China’s export subsidies that are not consistent with international trade obligations and a balanced business model,” said Rick Helfenbein, the association’s president and chief executive.