On April 10, the United States asked the World Trade Organization (WTO) to establish a panel to resolve whether China provides export subsidies in violation of its obligations under the WTO Agreement on Subsidies and Countervailing Measures. The United States alleges that China is providing more than 180 prohibited subsidies to a large range of enterprises in the sectors of agriculture, hardware and building materials, light industry, medical products, new materials, special chemical engineering, and textiles.
The request to establish a panel is the second and final step to initiate dispute settlement proceedings at the WTO. It must be preceded by a request for consultations, a step that the United States took in this dispute in February 2015, as reported in King & Spalding’s Trade & Manufacturing Alert in March. Because this dispute concerns alleged export subsidization, it operates under expedited procedures under which the Panel must issue its findings within three months of the date of its establishment, which occurred on April 22. If its findings are appealed, the Appellate Body must make a final determination no more than two months from the date of appeal. Thus, a ruling by the WTO can be expected later this year.