“We are committed to challenging China's WTO-inconsistent practices that harm American workers and businesses", U.S. Trade Representative Susan Schwab said of the filing, which mandates WTO-supervised talks between the two countries. "China's use of market-distorting subsidies creates an uneven playing field that subverts China's own efforts to foster consumption-led growth”.
American Government critics also contend that China's currency, the yuan, is so undervalued it helps make Chinese exports artificially cheap, harming foreign competitors and contributing to a record $206 billion U.S. trade deficit with China in 2005. The 2006 U.S. trade deficit with China is expected to top $230 billion.
WTO-supervised negotiations between Beijing and Washington will supersede talks between the two countries that they conducted on their own. If the next round of talks doesn't yield progress, the case will go before a panel of judges appointed by the WTO.
Friday's filing is the third time the United States has taken China before the WTO - which sets international trade rules and adjudicates trade disputes - since Beijing joined the world body in December 2001. The first U.S. case against China at the WTO, filed in March 2004, involved semiconductors and was settled. In the second case, in which the United States has been joined by Canada and the European Union, Washington charges that China unfairly requires its companies to use Chinese-made automobile parts. A panel of judges is reviewing that case.