The US government on Friday (19 December) said it had begun legal action at the World Trade Organization (WTO) to try to put a stop to various subsides provided by the Chinese government to help boost sales of Chinese-branded merchandise around the world.

The US Trade Representative's office said the subsidies include cash grant rewards for exporting, preferential loans for exporters, research and development funding to develop new products for export, and payments to lower the cost of export credit insurance. 

Among the industries that benefit are textiles and apparel, it said, adding that the subsidies "may unfairly alter the competitive landscape around the world for any industry competing with these Chinese products."

The USTR also said China's textile sector is helped by "other apparent export subsidies" which help products irrespective of whether they are famous brands. 

"We were disturbed to find that China still appears to be using WTO-illegal measures to promote its exports, ranging from textiles and refrigerators to beer and peanuts," Ambassador Susan C Schwab said. 

"We are going to the WTO because we are determined to use all resources available to fight industrial policies that aim to unfairly promote Chinese branded products at the expense of American workers, farmers, ranchers, manufacturers and intellectual property owners."

The US added it is concerned "not only because these programs appear to incorporate export subsidies (which are generally prohibited by applicable WTO rules), but also because of the protectionist industrial policy apparently underlying these programs." 

The request for dispute settlement consultations with the Chinese is the first step in a WTO dispute. 

Under WTO rules, parties that do not resolve a matter through consultations within 60 days may request the establishment of a WTO dispute settlement panel.