Thu, Feb 16, 2006 - Page 1 News List

US blasts China on trade deficit; Beijing defends its record

AFP , WASHINGTON AND BEIJING

The US administration announced on Tuesday the creation of a task force to ensure Chinese compliance with global trading rules, saying US trade with China "lacks equity, durability and balance."

Faced with a vast trade deficit with China, US Trade Representative (USTR) Rob Portman said Washington would take new steps to ensure Beijing's compliance with international trade obligations.

"Despite three consecutive years of growing US exports to China, our bilateral trade relationship with China today lacks equity, durability and balance in the opportunities it provides," Portman told reporters.

"The time has come to readjust our trade policy with respect to China."

He warned that Washington was prepared to pursue "legal options" if China did not take steps to address outstanding issues such as "inadequate" protection of intellectual property rights and rules that "discriminate" against imported auto parts.

Task force

Portman, releasing the results of a "top-to-bottom review" of trade with China, said his office would expand trade enforcement and establish "a China Enforcement Task Force" to be headed by a chief counsel for China trade.

The move is "unprecedented" but "this kind of country-specific enforcement team is needed to improve China's compliance and obligations," he said.

The review also called for the expansion of US trade negotiating capacity in Beijing, a new senior legal advisory task force on China trade policy and the dedication of new China-specific resources at the USTR office.

Some of the steps would be taken in coordination with US trading partners, especially the EU and Japan, Portman said.

The announcement came days after a US trade report showed the politically sensitive deficit with China widened to US$201.6 billion for last year, up 24.5 percent for the year, drawing fierce protests from Congress and US industry.

"As a mature trading partner, China should be held accountable for its actions and required to live up to its responsibilities including opening markets and enforcing intellectual property rights," Portman said.

"We will use all options available to meet this challenge."

The review also announced new mechanisms for enhanced interagency coordination within the US administration, and called for regular coordination with Congress on implementing an effective China trade policy.

Meanwhile, China defended its trade record yesterday, saying that its cheap products had saved American citizens hundreds of billions of dollars.

Mutually beneficial

Chinese officials were quoted as saying in state press yesterday that bilateral trade has been of just as much benefit to the US as to China and that should be recognized.

"The US people have enjoyed the cheap prices of made-in-China products," said Cheng Siwei (成思危), a senior official of the National People's Congress.

"These cheap products have helped save US$600 billion for the country over the past 10 years," Xinhua news agency quoted Cheng as saying.

"Products made in China facilitate US lives from when people wake up in the morning and to the time they go to bed at night."

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