U.S. says China to scrap some export subsidies

Thu Apr 14, 2016 4:11pm EDT
 
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By Diane Bartz

WASHINGTON (Reuters) - China has agreed to scrap some export subsidies on a range of products from metals to agriculture and textiles, the United States said on Thursday, in a step by Beijing to reduce trade frictions with Washington.

China ended a program which provided export subsidies of some $1 billion over three years to Chinese companies in seven economic sectors, the U.S. Trade Representative's office said.

Some industry executives were skeptical about the deal's impact given remaining disputes over other supports that China give to its exporting industries. Steel has been a particular flashpoint.

One source knowledgeable about the agreement said it was not comprehensive enough to do much to help the U.S. steel industry, given its focus was only on specialty steel products.

In part, the dropping of the subsidies is an effort by China to move away from labor-intensive production and emphasize more-sophisticated industries such as semiconductors.

"The Chinese want to become a high-tech country. They want to move up the value chain," said James Lewis, a senior fellow at the Center for Strategic and International Studies.

Chinese agriculture products that will lose the subsidies include apples, beef, mushrooms, pork, tea, tomatoes, beans, ginseng, poultry, seaweed and, garlic, USTR said.

Candidates in the U.S. presidential election, especially Republican front-runner Donald Trump, accuse China of treating the United States unfairly in trade.   Continued...

 
An employee works at a garment factory, which exports products to Europe, in Hefei, Anhui province January 19, 2015. REUTERS/Stringer