The World Trade Organization (WTO) launched an expert panel on Friday to probe whether China is 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, which might violate WTO regulations.

At Friday's meeting of the WTO's Dispute Settlement Body, China again defended its position, saying its tax measures mentioned by the United States and Mexico in the case are consistent with WTO regulations.

It is "very disappointing and deeply regrettable" that the United States and Mexico pursue this matter further by requesting the establishment of the panel for a second time, the Chinese delegation said in a statement.

The United States and Mexico had requested for a WTO panel on the dispute last month, but was rejected by China according to related WTO regulations.

"In the panel process, China will defend its position and interests and remain confident that relevant measures of China are consistent with its WTO obligations," the statement added.

In a separated case on Friday, China blocked an initial request by the United States for a WTO panel to investigate China's protection and enforcement of intellectual property rights (IPR).

"China consistently spares no efforts to enforce its IPR legislation with great success acknowledged by the international community," the Chinese delegation said in a statement.

"It is regrettable for China to see that the United States has chosen to request the establishment of a panel in spite of China's efforts to settle this dispute through consultations."

The United States has complained that China is not doing enough to crack down on counterfeit and piracy.

(Xinhua News Agency September 1, 2007)