WASHINGTON -- The United States Thursday requested the World Trade Organization (WTO) to establish a dispute settlement panel to deal with China's so-called industry subsidies.

"Although our two rounds of WTO consultations with China have been constructive, they have not resolved our concerns about China's apparent use of trade-distorting subsidies that it pledged to eliminate upon joining the World Trade Organization," said Sean Spicer, spokesman for the US Trade Representative (USTR).

"China has taken a positive step by repealing one of the subsidy programs we challenged, but much more needs to be done," he added.

The US initiated the dispute over the prohibited subsidies by requesting WTO consultations with China on February 2, 2007.

China's Ministry of Commerce voiced regret on February 3 over the move by the US side. A spokesman for the ministry said China and the US had actually kept bilateral contact over the issue all along.

Under WTO rules, the consultation normally lasts two months once it is started. If it fails, a WTO panel of experts will be formed to handled the dispute.

Spicer said Washington would "continue to prefer a negotiated settlement to this dispute," while continuing to pursue the WTO process.

The WTO Dispute Settlement Body (DSB) will consider the US request for the establishment of a panel at its next meeting on July 24, 2007.