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China canceled seven major industry hardware and building materials export subsidies

In the United States filed a complaint with the World Trade Organization (WTO), China has agreed to abolish its export subsidies many companies provide. To this end the two governments to reach a bilateral agreement to end more than a year of a continuing dispute.

US Trade Representative - Michael Froman (MichaelFroman) Thursday announced the agreement, saying, "For agriculture to textiles from seven different industries employed Americans a victory."

China to launch an attack on the United States in February 2015, encouraging China in seven sectors to provide for their export business. These industries are: textiles, clothing and footwear; advanced materials and metals; Light; specialty chemicals; medical products; metal building materials; and agriculture.

EU, Japan and Brazil, and later joined the complaint against China called "base" (to accept government subsidies in order to achieve the export target of industrial clusters) of. US officials have listed 179 such clusters, they had together around the WTO auto parts case found their alleged illegal subsidies. To ferret out details, US investigators carefully studied more than 5,000 pages translated from Chinese over the Chinese government documents.

Although China is trying to pay more attention to shift from dependence on exports of domestic consumption, but export enterprises still enjoy a series of benefits, while the United States believes these deals under WTO rules is prohibited. They include designated for the cash grants and free or preferential services.

Trade with China has become the 2016 US presidential election is an important topic, Republican presidential candidate leader Donald - Trump (DonaldTrump) Meng Beijing has often unfair to take advantage of US companies. Last year, the US trade deficit reached $ 366 billion. US trade deficit so far this year more than 10 percent higher year on year.

Peterson Institute for International Economics in Washington (PetersonInstituteforInternationalEconomics) trade experts - Gary Hufbauer (GaryHufbauer) said the agreement will do little to reshape trade flows. "It will not bring any major changes," he said. He added that it could only make the rising US trade deficit by 50 billion dollars.

On the occasion of China for making this concession, Europe and the United States does not recognize China threat "market economy status", market economy status would make Chinese products in anti-dumping cases be judged in accordance with China's current price. Without this status, Chinese companies accused of dumping may be compared with the price of a third country, the result will almost certainly be more expensive third countries. According to the terms of China's accession to WTO, China should be granted market economy status after the addition of 15 years (ie December).

Agreed to eliminate subsidies on the occasion, Beijing has also acknowledged that in the past 15 years, Chinese metals, coal, and other consumer products industry serious excess capacity. Chinese planners now fear, then rely on subsidies and bank loans to build a large number of factories, is destroying margins and increased debt to deal with a lot of drag on economic performance is difficult.