China has ended certain wind power equipment subsidies challenged by the U.S. in a World Trade Organization (WTO) dispute, according to U.S. Trade Representative (USTR) Ron Kirk.
The U.S. had challenged the Special Fund for Wind Power Equipment Manufacturing subsidies at the WTO following an investigation initiated in response to a petition filed by the United Steelworkers (USW).
The subsidies took the form of grants to Chinese wind turbine manufacturers that agreed to use key parts and components made in China rather than purchasing imports. The U.S. estimates that the grants provided to Chinese companies since 2008 could have totaled several million dollars. The size of the individual grants ranged between $6.7 million and $22.5 million, according to the USTR.
‘Subsidies requiring the use of local content are particularly harmful and are expressly prohibited under WTO rules,’ says Kirk. ‘This outcome helps ensure fairness for American clean technology innovators and workers. We challenged these subsidies so that American manufacturers can produce wind turbine components here in the United States and sell them in China. That supports well-paying jobs here at home.’
Leo W. Gerard, president of the USW, applauds the decision.
‘The Steelworkers Union petition and the Obama administration's pursuit of our complaint on the Special Fund provisions brought the Chinese to the table with a commitment to end this program,’ he says. ‘That's good news for our members, U.S. companies and American workers.’
The WTO dispute challenging the special fund subsidies was initiated as a result of an investigation launched by USTR in response to a petition the USW filed under Section 301 of the Trade Act of 1974, as amended. The investigation was initiated on Oct. 15, 2010. It probed allegations relating to a variety of Chinese policies and practices affecting trade and investment in the clean energy technology sector, including subsidies.
The U.S. then held WTO consultations with China on Feb. 18. In those consultations, the U.S. argued that the subsidies provided to Chinese wind turbine manufacturers under the Special Fund program were prohibited because they were conditioned on the use of domestic over imported goods. Following those consultations, China formally revoked the legal measure that had created the Special Fund program.