China says U.S. support for clean energy violates WTO rules

BEIJING Mon Aug 20, 2012 6:36pm IST

BEIJING (Reuters) - China's Commerce Ministry said on Monday the United States must cut support for six government-backed renewable energy programs or face unspecified penalties, in the latest trade dispute between the world's two largest economies.

The U.S. measures supporting wind, solar and hydroelectric energy programs in several U.S. states, including Massachusetts, Ohio and New Jersey, present a barrier to Chinese exports, the ministry said in a statement on its website.

The announcement, the final ruling in an investigation launched in November, comes as Beijing and Washington wrangle over duties on solar and wind energy products and U.S. presidential candidates trade barbs over renewable energy subsidies.

"The Commerce Ministry will adopt relevant legal measures, demands that the United States cancel parts of the measures that violate World Trade Organization rules and give Chinese renewable energy firms fair treatment," the ministry said.

Western solar companies have been at odds with their Chinese counterparts for years, alleging they receive lavish credit lines to offer modules at cheaper prices.

The United States in May imposed duties of about 31 percent on solar panel imports from China. It also hit Beijing last month with a second round of duties on wind turbine towers from China.

Chinese solar companies warned of a trade war last month after European firms led by Germany's SolarWorld asked the European Union to investigate complaints that Chinese rivals had been selling their products below market value in Europe.

President Barack Obama has tried to parry Republican presidential candidate Mitt Romney's attacks on his economic record, accusing Romney of promoting policies that would hurt renewable energy and cost jobs in important political swing states. Romney says Obama is soft on China.

(Reporting by Michael Martina; Editing by Robert Birsel)

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