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US wins end to China's 'Famous Brand' subsidies – USTR
Dec '09
U.S. Trade Representative Ron Kirk announced an agreement between the United States and China confirming China's termination of many dozens of subsidies that had been supporting the export of "famous brands" of Chinese merchandise and other Chinese products of all kinds around the world. These subsidies were the subject of a World Trade Organization (WTO) dispute initiated by the United States, because export subsidies are illegal under WTO rules.

The termination of the subsidies will level the playing field for American workers in a wide range of manufacturing and export sectors, including household electronic appliances, textiles and apparel, light manufacturing industries, agricultural and food products, metal and chemical products, medicines, and health products.

"I am very pleased that today we have signed an agreement with China confirming full elimination of the numerous subsidies we identified as prohibited under WTO rules. This agreement demonstrates President Obama's commitment to ensuring that American workers, farmers, ranchers, manufacturers, and producers get a fair chance to compete for business around the world, to sell more goods to global consumers, and to bring jobs and other benefits of our trade agreements back home," said Ambassador Kirk.

"This outcome represents a victory for the full spectrum of U.S. manufacturers and their workers, given the reach of these Chinese industrial policy initiatives. We are pleased that the WTO dispute settlement mechanism has worked as intended, enabling the parties to reach an appropriate resolution," Ambassador Kirk added.

The agreement is designed to resolve U.S. concerns raised in a WTO case the United States initiated in December of last year. In that case, the United States had challenged a Chinese industrial policy that generated a vast number of central, provincial and local government subsidies promoting increased worldwide recognition and sales of famous brands of Chinese merchandise in apparent contravention of WTO rules.

The challenged subsidies were tied to exports, giving an unfair competitive advantage to Chinese products and denying U.S. manufacturers the chance to compete fairly with them in the United States and in third country markets.

United States Trade Representative

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