China says domestic politics behind US, Mexico’s WTO subsidies probe

BEIJING—The efforts by the United States and Mexico to push for investigations by the World Trade Organization into China’s alleged subsidizing of industrial exports are motivated by domestic political aims, the Chinese Ministry of Commerce said on Monday.
The two countries had lodged the lawsuit with huge misunderstandings of China’s related policies, said the MOC spokesman. On Friday, the WTO set up an expert panel to probe whether or not China was illegally subsidizing its industrial exports as alleged by the United States and Mexico.
The United States first filed the case to the WTO in February and later was joined by Mexico. The two countries complained that China was using tax breaks and other incentives to subsidize its exports in violation of the WTO regulations.
“Their actions are motivated by domestic politics. They attempt to mix up the self improvement in China’s tax laws and regulations with the fruits of the WTO’s dispute settlement mechanism,” said the spokesman. “China will not change its way of self perfecting tax laws and regulations in accordance with the demands of its social and economic development,” he said.
The United States and Mexico have also turned a blind eye to the progress made and actual conditions of China’s economic system reforms, he claimed. “Some of the subsidies in their lawsuit have already been scrapped, and China’s policies will also be in line with the WTO regulations after the Enterprise Income Tax Law comes into effect.”
The Enterprise Income Tax Law will be effective on Jan. 1, 2008. The United States and Mexico have consistently made the requests for a WTO probe without acknowledging the progress made in consultations with China on March 20 and June 22 and China’s sincere and constructive attitude, the spokesman added.—Xinhua