CHIANA-RETALIATION ON PROTECTIONISM.
China is using regulations and tax policies to discriminate against foreign competitors, the U.S. Trade Representative’s office said in its annual report.
The trade estimate report, the first by the Obama administration, also includes complaints from companies about piracy in China of copyrighted products and chemicals regulations in the European Union. The 536-page report released today lists barriers in countries from Angola to Vietnam, and follows a pledge by the new U.S. Trade Representative, Ron Kirk, to crack down on trade barriers.
The report "puts countries on notice that their trade policies are being watched," Charlene Barshefsky, the U.S. trade representative from 1997 to 2001, said in an interview. "It puts on the table the areas of principle concern."
The document steers clear of any discussion about the effect of currency policies in China, the largest foreign investor in U.S. government debt and America’s second-biggest trading partner. Members of the House Ways and Means Committee, led by Charles Rangel, a New York Democrat, last week wrote to President Barack Obama asking him to acknowledge currency manipulation as a "major artificial barrier" to U.S. exports.
"The Bush administration attempted to address the issue of currency manipulations through ’quiet diplomacy,’ mostly in a bilateral context with many other economic issues competing for space on the agenda," the lawmakers wrote in the March 26 letter. "That approach failed."
Obama left Washington today for a financial summit of the Group of 20 nations in London where he will also have his first meeting with Chinese President Hu Jintao.
’Buy America’
The catalogue of foreign protections comes amid complaints worldwide at recent U.S. actions that would restrict trade, including "Buy America" rules attached to economic stimulus legislation and the cancellation of funding for a program allowing Mexican trucks on U.S. roads.
"There’s some irony here, there’s no doubt about it," said Dan Ikenson, the director of trade policy at the Cato Institute in Washington, a group that advocates for lower trade restrictions.
With China, which ran up a record $266 billion trade surplus with the U.S. last year, the report repeated many of the complaints raised by the Bush administration in recent years: lax protection of patents and copyrights leading to theft of movies, music and software; agriculture health standards inhibiting imports of beef, poultry and pork; and Chinese steel subsidies threatening to foster a glut of steel.
Predictable and Transparent
"To more fully meet its obligations as a responsible stakeholder in the world trading system, China will need to further institutionalize market-oriented reforms," the trade office said in the report. "China should also take additional steps to make its trade regime more predictable and transparent."
In addition, the trade office complained that China is taking new steps to limit foreign investment by banks, credit card companies, insurers and other financial firms.
"The United States is concerned about the increase in proposed and adopted measures that restrict investment," the report concluded. "Often, these restrictions are accompanied by other problematic industrial policies, such as the increased use of subsidies and the development of China-specific standards."
bloomberg.com