CHINA MAKES PEACE WITH WTO

China agrees to end domestic wind power subsidies
Richard Wolf, June 7, 2011 (USA Today)

"China has agreed to stop subsidizing wind power companies that use domestically produced components rather than imports, a victory for U.S. manufacturers. U.S. Trade Representative Ron Kirk plans to announce China's action Tuesday, seven months after the United States launched an investigation following a complaint from the United Steelworkers.

"The action is significant because of intense competition between U.S. and Chinese manufacturers of clean energy technology. Whether it will lead to other such actions involving questionable Chinese trade practices remains unclear…"

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"The World Trade Organization prohibits government programs that give preferences to companies using local products, such as China's program of "indigenous innovation." The wind power grants ranged from $6 million to $22 million, Kirk's office says…

"China is the United States' biggest competitor in terms of energy innovation. Among emerging markets seeking to compete in manufacturing new technologies, it has by far the greatest resources to invest…"

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"James Bacchus, a former World Trade Organization chief judge and member of Congress, … notes that other forms of trade protectionism are common among nations seeking to help domestic industries. As an example, he cites the Buy American provisions of the 2009 economic stimulus law that require the federal government in most cases to use domestic iron, steel and manufactured goods."

[Eswar Prasad, Cornell University:] "[The agreement is] symbolically very important…Whether it opens the floodgates to a broader set of commitments remains to be seen…I think it is premature to declare victory, but it is certainly a hopeful step."