The US has challenged the Chinese Government over its extensive export subsidy programme, which benefits manufacturers of a number of products including textiles, apparel and footwear.

US Trade Representative Michael Froman said a dispute settlement case has been filed against China at the World Trade Organization (WTO) over its 'Demonstration Bases-Common Service Platform' export subsidy programme.

Under the programme, China provides prohibited export subsidies through 'Common Service Platforms' to manufacturers and producers across seven economic sectors and dozens of sub-sectors located in more than 150 industrial clusters throughout China known as 'Demonstration Bases'. He described the programme as “unfair” and “harmful to American workers and American businesses of all sizes”.

“President Obama has made vigorous enforcement a touchstone of his trade agenda,” said Froman. “Under the President’s leadership, USTR will continue working tirelessly to ensure China and all WTO members play by the rules so we can grow solid, middle-class jobs here in America. American workers, farmers, manufacturers, and businesses rank among the most productive and innovative in the world, and where there is a level playing field they can compete and win.”

Exports from 'Demonstration Bases' comprise a significant portion of China’s global exports. For example, in 2012 sixteen of the 40 bases in the textiles sector accounted for 14% of China’s textile exports.

Consultations are the first step in the WTO dispute settlement process. If the US and China are not able to reach a mutually agreed solution through consultations, the US may request the establishment of a WTO dispute settlement panel.

The National Council of Textile Organizations (NCTO) applauded the move by Froman to pursue dispute settlement consultations.

“It has been the NCTO's long-standing position that China's rise in the global textile market has been substantially aided by illegal and unfair trading practices,” said NCTO president Augustine Tantillo. “We applaud the Obama Administration for today's decision to hold our international trading competitors to their WTO obligations.”