The Obama administration requested consultations before the Geneva-based World Trade Organization, accusing Beijing of providing unfair government grants to Chinese energy companies, subsidies with an estimated total value of several hundred million dollars, said the Office of the U.S. Trade Representative in a statement.
The filing brings into question the practices of China’s Special Fund for Wind Power Manufacturing, through which, “China appears to provide subsidies that are prohibited under WTO rules because the grants awarded under the program seem to be contingent on Chinese wind power equipment manufacturers using parts and components made in China rather than foreign-made parts and components,” according to the USTR statement.
According to the USTR, the grants available range between $6.7 million and $22.5 million, and the recipients – Chinese manufacturers of wind turbines and Chinese manufacturers of parts and components for wind turbines – can receive multiple grants as the size of the wind turbine models increases.
The case is in response to a September 2010 petition from the United Steelworkers union. The union alleged that Chinese businesses are able to sell wind and solar equipment on the international market at lower prices than their competitors because they receive subsidies, reports the Los Angeles Times.
Portions of the USW complaints about wind energy projects were resolved by the two nations earlier in December, but the remaining issues will be mediated through WTO consultations, according to the USTR statement.
Representatives from Beijing and Washington will have to discuss a solution within the World Trade Organization, and if no solution is reached, the US can ask the WTO to move toward sanctions, reports AFP