U.S. hopeful on APEC green goods pact, despite China dispute

Reuters News
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Posted: Jul 31, 2012 6:35 PM
U.S. hopeful on APEC green goods pact, despite China dispute

By Doug Palmer

WASHINGTON (Reuters) - The United States is optimistic it can strike a deal with China and other Asia-Pacific countries to cut tariffs on green technology goods despite frictions with Beijing over the burgeoning trade in renewable energy products, a top U.S. trade official said on Tuesday.

"I think we're on track to do that," Deputy U.S. Trade Representative Demetrios Marantis said.

President Barack Obama and other leaders of the 21-economy Asia Pacific Economic Cooperation agreed in November to a goal of cutting tariffs to 5 percent or less on a range of environmentally friendly goods by the end of 2015.

APEC members are now negotiating over which products would be covered by the tariff cap and hope to reach agreement by the next leaders' meeting in Vladivostok, Russia, in early September.

A 2010 U.S. Commerce Department report said the global market for environmental technologies was $782.4 billion in 2008, with the United States by far the largest single market at $299.5 billion.

Depending on which products are included in a tariff-capping agreement, the pact could be a boon for big U.S. manufacturers such as General Electric and United Technologies and their competitors around the Asia Pacific region.

Washington has proposed capping tariffs on solar panels, water and wind turbines, water treatment pumps, waste incinerators, deep discharge batteries and other products to spur trade and reduce the costs of the goods.

However, since the November APEC meeting, it has slapped preliminary duties on solar panels and wind turbine towers made in China in response to allegations from U.S. manufacturers that the imports were unfairly priced and benefited from generous government subsidies.

China has strenuously protested against the duties, and stepped up pressure on the United States by launching its own investigation into charges that U.S. and South Korean producers are selling polysilicon, a raw material used in solar panels, in the Chinese market at unfairly low and subsidized prices.

NO LIST FROM CHINA

When APEC trade ministers met in Kazan, Russia, in June, China was one of seven APEC members that did not present a list of green technology goods for the proposed tariff cuts, raising concerns the group would be unable to reach agreement.

Negotiators have made further progress since then, including last week in Mexico City, Marantis said in an interview.

"We obviously want to make sure the list is credible and reflective of the priorities of all 21 economies," he said when asked if he expected any agreement reached in Vladivostok to be significant enough to spur additional trade.

He dismissed the idea that U.S.-China friction over solar and wind energy products could undermine the APEC environmental goods initiative, calling that "a completely separate issue."

Marantis, the lead U.S. trade official on China, said the two countries were continuing work on a number of other trade irritants, despite this year's U.S. presidential election and a once-in-a-decade leadership transition under way in Beijing.

Last week, Marantis and Commerce Under Secretary Francisco Sanchez met with Chinese Vice Minister of Commerce Wang Chao to begin to identify priority issues for this year's annual meeting of the U.S.-China Joint Commission on Commerce and Trade.

Marantis said the two sides still have not picked a date for the meeting, which brings together top trade officials from the two sides to address commercial concerns.

Last year, the United States touted Chinese commitments to remove import barriers related to electric vehicles, improve enforcement of intellectual property rights and take steps aimed at increasing purchases of non-pirated software by government agencies and state-owned enterprises.

Asked how well China was carrying out those commitments, Marantis at first said "it's too soon to tell," but then acknowledged progress on Beijing's part.

In particular, actions taken by China to address concerns over its indigenous innovation policy have been "a real big win, generally" for the United States, he said.

Washington has complained about the use of product catalogs that mostly excluded foreign manufacturers to guide Chinese government purchases in a bid to spur domestic companies to develop more cutting-edge technologies.

"From where we were when we started to where we are now, it's actually rather remarkable," Marantis said.

The United States is beginning to see progress even at the provincial level in getting rid of the catalogs, he said.

(Editing by Mohammad Zargham)