US Trade Representative Susan C Schwab has stepped into the ongoing debate about Chinese textile subsidies, warning the Chinese government that unless it eliminates certain export subsidies it could face World Trade Organization (WTO) dispute cases being filed in Geneva. 

The action was outlined in a letter from Ambassador Schwab to Chinese Commerce Minister Chen last week, according to Senator Elizabeth Dole, a North Carolina Republican who has raised concerns about China's textile subsidies.

According to calculations by the National Council of Textile Organizations (NCTO) last year, China provides 73 subsidies to its textile industry.

NCTO believes that as many as two dozen of the Chinese subsidies appear to be export contingent - export contingent subsidies are de facto illegal under WTO rules.

NCTO president Cass Johnson said in a statement yesterday (28 October): "While we do not know which particular subsidies USTR is planning action against, many of the subsidies in the NCTO filing were of significant size, totalling in some cases hundreds of millions of dollars. 

"Eliminating these subsidies could have a material impact on China's ability to export goods overseas at artificially low prices."