US files WTO case against Chinese industrial subsidies

The US has commenced WTO dispute settlement proceedings against China. The US government alleges that a range of subsidy programmes "illegally support the export of manufactured goods as well as discriminate against imports".

Umm, am I missing something here?

The International Center for Trade and Sustainable Development notes that "Both domestic manufacturing groups and the Democratic-led Congress have been putting pressure on the Bush administration to take sterner action on trade with China. They blame unfair Chinese competition for industrial job losses and the US' yawning trade deficit".

US Trade Representative, Susan Schwab, had this to say:

The United States believes that China uses its basic tax laws and other tools to encourage exports and to discriminate against imports of a variety of American manufactured goods … China's subsidies can particularly distort trade conditions for small- and medium-sized American enterprises and their workers.

Umm, has Schwab, or anyone in the US government, stopped for one second and thought about what the US’ agricultural subsidies are doing to "small- and medium-sized" enterprises (and micro one especially) in the global south?


The US government’s rhetoric about the damage China is doing to "free trade" – through, among other things, a devalued Yuan, dumping cheap textiles and shoes into US and EU markets and these industrial subsidies – is ridiculous in the face of continuing (with no sign of anything but the most tokenistic of gestures of reduction) and massively trade distorting agricultural subsidies.

The Chinese subsidies, particularly those in the industrial realm, might well have an impact on some US firms, the numbers of people affected by US agricultural subsidies (particularly those on corn, soybeans and cotton) world-over is significantly more substantial. Not that the US government has a habit of giving more than a passing acknowledgement to the plight of anyone outside the States (and, so might argue, to more than a few inside the country).

When close to half the world’s population live on less than US$2 per day (purchasing power parity) and the majority of them live in rural areas (though urban poverty is an increasing trend) and survive on subsistence (or close to it) agriculture, how are people to sell what little agricultural produce they have left after family consumption, when imported US and EU crops sell in markets for less than poor rural farmers can grow them?

And the US feels it has the right to whinge about Chinese trade distorting subsidies?

I think I’m going to be sick.

Think this isn’t a big issue? Then try it for yourself (or an approximation of it anyway) by taking the UN’s Food and Agriculture Organisation’s $2 a day challenge. It won’t give you any sense of how hard life is for the rural poor and, now that I think about it, you are likely to find it much easier to live on $2 a day due to US and EU trade policy, so perhaps that’s a bad idea.

A much better idea is to stop supporting the status quo and look at where the produce you buy in the supermarket is actually coming from. If there’s a farmer’s market near by try shopping there instead (in Canberra there are at least 4 that I know of – C and I head out to the one at Exhibition Park most Saturdays, the food is of a much higher standard than that at the supermarkets and significantly cheaper – thanks to cutting out the corporate greed). If you do have to buy produce at supermarkets try to get organic wherever possible, as chances are it has been produced in a much more sustainable manner (environmentally as well as economically).

End of rant.