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US Toughens Talk on Trade with China


A senior U.S. trade official said Tuesday the government is reviewing China's compliance with international trading rules and will not hesitate to enforce the rules in the World Trade Organization. The U.S.-China Economic and Security Review Commission spent an entire day Tuesday examining U.S. trade with China and Chinese trade practices.

The U.S. Trade Representative office's top China official, Timothy Stratford, told the commission his agency recently conducted an inter-agency, "top-to-bottom," review of U.S. trade policy with China. "Our view is that U.S.-China trade relations are entering a new phase, in which greater accountability on China's part, and greater enforcement on the administration's part, are needed," he said.

In terms of what problems still remain, he listed some of the findings presented in his office's annual report to Congress on China's compliance with WTO rules, which was issued in December 2005. "We concluded that China has not yet fully embraced the key WTO principles of market access, non-discrimination and national treatment, nor has China fully institutionalized market mechanisms and made its trade regime predictable and transparent," he said.

He added that some Chinese practices do run counter to WTO. requirements. "While China has made some important progress in implementing specific commitments from its accession agreement, we found that it continued to use an array of industrial policy tools in 2005 to promote or protect favored sectors and industries, and these tools at times collide with China's ongoing WTO obligations," he said.

Regarding enforcement, Stratford said the U.S. government will use all the tools at its disposal to ensure that China lives up to its WTO commitments. These include pursuing cases within the U.S. legal system or through the WTO's dispute settlement process. "Utilizing these tools should not be viewed as a failure in our bilateral trade relationship. If our two countries have a dispute and use legal channels to resolve it, it is not a sign of an adversarial relationship, but rather the sign of a mature one." he said.

The United States and the European Union last week took a dispute over car parts to the World Trade Organization. China expressed regret over the move.

Later this month, the WTO will meet in Geneva to conduct its first trade policy review of China.

Stratford said U.S. trade officials are facing a difficult, but not impossible, task. "It's not easy to make progress in a lot of these discussions. That said, we have tried to identify, again, some of what we see as the low-hanging fruit in terms of issues, where we think that the Chinese government would have the capability to address some of our issues," he said.

He declined to get into the specifics of the ongoing negotiations, but said he hopes for positive announcements soon.

Trade is expected to be a top issue when Chinese president, Hu Jintao visits the United States later this month.