On September 17, 2012, the Office of the U.S. Trade Representative (USTR) issued a press release announcing that the U.S. has requested consultation with the Chinese Government at the World Trade Organization (WTO) regarding China's "export base" subsidy program for Auto and Auto Parts Manufacturers. Under this program, Chinese auto producers receive a subsidy from their Government if they meet certain export performance requirements.

According to the press release, "China’s program appears to provide export subsidies that are prohibited under WTO rules because they severely distort trade. The subsidies provide an unfair advantage to auto and auto parts manufacturers located in China, which are in competition with producers located in the United States and other countries. Based on publicly available documents, “export bases” made at least $1 billion in subsidies available to auto and auto-parts exporters in China during the years 2009 through 2011."

The press release also mentions that the US requested the establishment of a dispute settlement panel by the WTO to handle the antidumping and countervailing duties levied on U.S.-made automotive exports to China. This is the next step in a WTO dispute settlement process, if the matter is not resolved within 60 days of the consultation request.

The full text of the press release is available online here.