The World Trade Organization (WTO) has been urged by US, Japan and EU to come up with stronger rules against subsidies Photo: AFP

U.S., Japan, EU seek new global rules limiting subsidies


Washington, Tokyo and Brussels on Tuesday joined forces in calling for stronger global rules against government subsidies that distort trade, a practice China has long been accused of exploiting.

The governments called on the World Trade Organization to beef up existing regulations, which they said in a statement are "insufficient to tackle market and trade distorting subsidization."

But they refrained from naming China directly.

U.S. Trade Representative Robert Lighthizer met Tuesday with Japan's Economy, Trade and Industry Minister Kajiyama Hiroshi, and European Trade Commissioner Phil Hogan, and also discussed the need to prevent forced technology transfers -- an issue at the heart of the U.S.-China trade conflict.

"These unfair practices are inconsistent with an international trading system based on market principles" and undermine "growth and development," the statement said.

The latest statement came after many months of trilateral meetings, a rare display of multilateral cooperation by the administration of President Donald Trump, who has launched multi-front trade wars and crippled the WTO's dispute settlement function.

The three sides called on the WTO to ban government support that is unlimited, or that is given to insolvent or ailing enterprises with no "credible restructuring plan," companies that cannot get long-term financing or investment on their own, or for debt forgiveness.

They also called for a ban on subsidies for industries that are over capacity.

This is another issue behind long-standing complaints against China in industries like steel and aluminum, where the markets have been flooded with supply, driving down prices and pushing some firms out of business.

The officials also want to make it easier for WTO members to file complaints against other harmful subsidies, including those supporting uncompetitive firms.

Such subsidies can create massive manufacturing capacity "without private commercial participation" or lower domestic input prices in comparison to the prices of the same goods when they are export bound, the statement said.

© 2020 AFP

©2020 GPlusMedia Inc.

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But they refrained from naming China directly.

Cowards. As if it's not bad enough that it's like trying to close the barn doors after the horses ran out over a decade ago. An estimated 80% of Chinese companies are directly or infirectly tied to the Chinese government. And that government is a single party dictatorship.

1 ( +2 / -1 )

Any country with either a space program or nuclear programs shouldn't be on the "developing country" list with the WTO help that comes with that designation.

I'm seeing weasel words, so that Airbus, Boeing, and a few specific French companies aren't included.

China currently has a govt-directed economy. This is a different system than most of the rest of the world, so it needs to be treated differently as long as that is the situation.

I'll leave it to the economists to figure out, but there is a huge difference between having only corporate resources and the resources of a govt behind the company to take risks.

No Govt official should be a sales person for any corporate sales.

2 ( +2 / -0 )

"No more subsidized industry!" "No TPP!"

Say the Japanese government officials who gain so much support from lobbies like JA, and continue to dish out rice and farm subsidies in the antiquated quota system to buy votes.

If you're against subsidies, I don't think you should get to pick and choose based on what you perceive to be disadvantageous.

1 ( +1 / -0 )

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