USTR intensifying China WTO enforcement

Reuters News
Posted: Dec 13, 2011 7:48 PM
USTR intensifying China WTO enforcement

By Doug Palmer

WASHINGTON (Reuters) - A top U.S. trade official said on Tuesday the United States was not satisfied with the way China was meeting its obligations in the World Trade Organization and would continue to step up its enforcement activity.

"We are intensifying our efforts and we are not going to let go," Assistant U.S. Trade Representative for China Claire Reade told the Congressional-Executive Commission on China.

The panel, created by a 2000 law establishing "permanent normal trade relations" with China, was holding a hearing on how well China has honored its WTO commitments during its first 10 years of membership.

Reade said China fell short on a number of fronts. He highlighted four areas that were top concerns for the United States: China's agricultural market barriers, its weak intellectual property rights protection, its discriminatory industrial policies and its "overly burdensome and capricious licensing and operating requirements" in services sectors.

She noted that President Barack Obama's administration has already filed five cases against China at the WTO since taking office in January 2009.

"I think it's very clear this administration has made enforcement a top priority," Reade said.

However, she declined further comment after the hearing when asked if any new cases were in the works.

Representative Chris Smith, the Republican co-chair of the panel, raised concerns about what he said was China's poor record on workers' rights and pledged to ask the Obama administration to launch a trade investigation into the matter.

"It seems to me an idea whose time has come," Smith said.

Reade made no commitment to launch such a probe but said "this administration believes (workers rights in China) is an incredibly important issue."

The AFL-CIO labor organization filed a formal "Section 301" petition during the administration of President George W. Bush asking whether China's labor regime constituted an unfair trade practice that justified imposing tariffs on Chinese goods to protect American jobs. The request was turned down.

Now, with many of its concerns still not addressed, the labor group is "considering whether to update and refile the worker rights petition," the AFL-CIO's deputy chief of staff Thea Lee said in an email.

The panel's Democratic co-chair, Senator Sherrod Brown, pressed Reade on several issues, including how the Obama administration would respond if it received a formal petition to investigate China's currency practices as an unfair trade practice.

The Bush administration turned down several requests from the AFL-CIO and members of Congress to launch such a probe.

Reade did not answer Brown's question directly, noting the Treasury Department has the final say on currency concerns. However, she said that both Obama and Treasury Secretary Timothy Geithner have pressed China to let its currency rise more quickly in value.

Many economists believe China's currency is undervalued by as much as 25 percent, giving Chinese companies an unfair price advantage in international trade.

A spokeswoman for Brown said after the hearing that the senator was not necessarily advocating that groups file a petition asking for a China currency probe.

But "Brown is a strong proponent of the Section 301 process to provide relief to American workers and companies forced to compete against unfair trade barriers," the aide said.

The AFL-CIO's Lee said her group had no plans to ask the Obama administration for a currency probe.

Such a request would put Obama in a difficult position ahead of the November 2012 presidential election.

(Reporting by Doug Palmer, Editing by Neil Stempleman)