DISPUTE SETTLEMENT

DS: China — Grants, Loans and Other Incentives

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

  

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Current status

 

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Key facts

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Complainant:
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Third Parties:
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(as cited in request for consultations)
Request for Consultations received:

  

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Latest document

  

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Summary of the dispute to date

The summary below was up-to-date at

Consultations

Complaint by Mexico.

On 19 December 2008, Mexico requested consultations with China with regard to certain measures offering grants, loans and other incentives to enterprises in China.

Mexico indicated that these grants, loans and other incentives are reflected in a number of measures, as well as in any amendments or any related or implementing measures including measures relating to the China World Top Brand Programme and the Chinese Famous Export Brand Programme.

Mexico considers that these measures appear to provide enterprises in China with grants, loans and other incentives contingent upon export performance. Accordingly, the measures appear to be inconsistent with Article 3 of the SCM Agreement. Additionally, to the extent that these measures provide subsidies for agricultural products, they appear to be inconsistent with Articles 3, 9, and 10 of the Agreement on Agriculture. The measures also appear to be inconsistent with the PRC's obligations under paragraph 12.1 of Part I of its Accession Protocol, as well as paragraph 1.2 of Part I of its Accession Protocol (to the extent that it incorporates paragraph 234 of the Report of the Working Party on the Accession of China), which forms part of the terms of accession agreed between the PRC and the WTO and is an integral part of the WTO Agreement. Finally, the grants, loans and other incentives appear to be inconsistent with Article III:4 of the GATT 1994 to the extent that the measures benefit Chinese-origin products and not imported products.

On 15 January 2009, Canada, the European Communities and Turkey requested to join the consultations.  On 16 January 2009, Australia, Colombia and the United States requested to join the consultations. On 19 January 2009, Ecuador, Guatemala and New Zealand requested to join the consultations.  Subsequently, China informed the DSB that it had accepted the requests of Australia, Canada, Colombia, Ecuador, the European Communities, Guatemala, New Zealand, Turkey and the United States to join the consultations.

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