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United States Moves Forward to Assert U.S. Trade Rights in Disputes with China and Indonesia

Washington, D.C. – U.S. Trade Representative Michael Froman announced today that the United States has moved forward in two offensive World Trade Organization (WTO) disputes with China and Indonesia.  In both of these disputes, the Office of the U.S. Trade Representative (USTR) is seeking to unlock economic opportunity for American workers, farmers, and businesses of all sizes by challenging policies leading to unfair competition and by removing unwarranted barriers to U.S. exports in key Asian markets.

With regard to China, USTR has requested that the WTO establish a dispute settlement panel concerning China’s “Demonstration Bases-Common Service Platform” export subsidy program.  This program appears to grant unfair, prohibited export subsidies to a large range of Chinese manufacturers and producers, from sectors like textiles to agriculture to chemicals to and advanced materials and metals.  The WTO will establish this panel, per our request, at the next meeting of the WTO Dispute Settlement Body (DSB) on April 22, 2015.

USTR has also asked that the U.S. panel request filed on March 18, 2015, on Indonesia’s import licensing restrictions be considered by the WTO at the same April 22 meeting.  Our dispute against Indonesia challenges a multitude of burdensome import licensing restrictions imposed by Indonesia on horticulture, animals, and animal products.  These unfair restrictions are harming American farmers and ranchers working to sell their world-class agricultural products to the 4th most populous country in the world.

“These challenges to harmful Chinese and Indonesian policies underscore that the Obama Administration is determined to assertively enforce U.S. rights under our trade agreements so that we can promote the interests of American workers and businesses of all sizes,” said U.S. Trade Representative Michael Froman. “Under President Obama’s leadership, the United States will continue to hold countries like China and Indonesia to account at the WTO so we can unlock all the economic opportunities we’ve negotiated in our agreements and help trade deliver for Main Street.  Growing Made-in-America exports to support more well-paying jobs here in America is a key component of the President’s Middle-Class Economics agenda, and upholding the high trade standards that the U.S. stands for is vital to that effort.”

Background on China-Demonstration Bases:

China appears to be providing export subsidies under the Demonstration Bases-Common Service Platform program and related subsidies to Demonstration Bases.  Export subsidies provide an unfair advantage to a vast array of Chinese exporters and are prohibited under WTO rules. 

The United States requested consultations with China regarding these prohibited export subsidies on February 11, 2015, and held consultations with China on March 13 and April 1-2.  The consultations failed to resolve U.S. concerns, and the United States has decided to move forward by requesting the WTO to establish a dispute settlement panel.

For further background on this dispute, see the USTR press release on the consultation request here.

BACKGROUND ON INDONESIA- IMPORT LICENSING

Since 2012, Indonesia has maintained unjustified and trade-restrictive licensing regimes for the importation of horticultural products and animals and animal products.  In conjunction with its import licensing regimes, Indonesia prohibits the importation of certain products at certain times and restricts the sale of imported products within Indonesia. 

The United States announced the filing of a request for establishment of a WTO panel jointly with New Zealand on March 18, 2015.  The United States and New Zealand have now formally requested that the WTO consider their panel requests at the next WTO Dispute Settlement Body meeting on April 22.

See a copy of the panel request here.

For further background on this dispute, see the USTR press release on the panel request here.