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US to use "all available tools" on China trade-USTR
March 1, 2012 / 9:22 PM / 6 years ago

US to use "all available tools" on China trade-USTR

* Romney has criticized Obama on China trade

* Report targets Chinese subsidies, other policies

* Geithner, Kirk send letter on WTO currency seminar

By Doug Palmer

WASHINGTON, March 1 (Reuters) - The U.S. Trade Representative’s office vowed on Thursday to make sure China honors its trade commitments, but did not lay out any specific new cases it plans to bring.

“Given the importance of this growing trade relationship, the United States will use all available tools in 2012 to ensure that China engages in fair play on trade and that U.S. exporters have a fair shot to compete,” the USTR said in its annual report on the president’s trade agenda.

The latest promise to get tough with China comes after the U.S. trade deficit with the Asian heavyweight rose for a second straight year in 2011 to a record $295 billion.

Republican presidential candidate Mitt Romney has criticized Obama for not doing more to “crack down on China for stealing jobs” and pledged to take action against Beijing over its currency practices if he wins the White House.

Obama has responded by creating an Interagency Trade Enforcement Unit he says will draw on new and existing resources from throughout the executive branch to make sure China and other countries comply with trade rules.

USTR’s report did not identify any new trade cases that Washington might bring against Beijing, but said enforcement efforts would focus on ending unfair Chinese subsidies and policies that discriminate against U.S. firms.

China committed to lower tariffs on thousands of goods and make other market-opening reforms when it joined the WTO in 2001. U.S. officials complain Beijing has backslid on these reforms since 2006, increasing the state’s role in what is now the world’s second largest economy.

The United States also has pressed China to move more quickly to a market-oriented exchange rate, saying Beijing keeps its currency at an artificially low value against the dollar to give its companies an unfair advantage in international trade.

“We will also continue to press China to open investment opportunities, to complete negotiations to join the WTO Government Procurement Agreement by offering comprehensive coverage of its procurement, and to increase transparency and eliminate market access barriers in areas ranging from agricultural goods to services,” the trade office said.

The Obama administration has filed six cases at the WTO since taking office, or an average of two per year. Five have been against China, including two last fall against Chinese duties on U.S. poultry and a specialty steel product.

CLOSED-DOOR MEETING

Meanwhile, U.S. Treasury Secretary Tim Geithner, Commerce Secretary John Bryson and Trade Representative Ron Kirk met on Thursday behind closed doors with members of the House of Representatives Ways and Means Committee to discuss China trade.

Committee Chairman Dave Camp, a Michigan Republican, told reporters after the meeting he believed the administration was serious about increasing enforcement on Beijing.

“And I think we have a bipartisan effort to make sure they have the tools to do that,” Camp said, referring to a bill to ensure the Commerce Department can impose countervailing duties on subsidized goods from “non-market economies” like China after a recent court decision struck that practice down.

The court ruled the Commerce Department should have sought legislation from Congress in 2005 when it changed policy to begin using countervailing duties against China.

Camp, who opposes popular legislation to crack down on China’s currency practices, kept the door open to other possible measures to address China trade concerns.

No additional bill is on the horizon, but Camp said “We’ll always keep reviewing all the options on that.”

Camp also released a letter from Geithner and Kirk on U.S plans for a seminar at the World Trade Organization in late March on the relationship between exchange rates and trade.

He and Senate Finance Committee Chairman Max Baucus have urged that the administration use the meeting to once again press China to move more rapidly to a market-based exchange rate.

Geithner and Kirk said they expected the seminar to influence an ongoing debate within the WTO over exchange rate practices, even though it would not be a formal review of countries’ policies or global currency rules.

“The United States intends to underscore the importance of flexible exchange rates in promoting more balanced global trade and faster and more efficient global adjustment of external balances,” the administration officials said in the letter.

They noted China has made progress on revaluing its currency but said it was “insufficient.”

Editing by Philip Barbara

Our Standards:The Thomson Reuters Trust Principles.
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