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Sat, Jan 14, 2006 - Page 12 News List

China trade deficit angers US industry

`PREDATORY' POLICIES Reports that the trade deficit with China could exceed US$200 billion for last year incensed US industry insiders who called for `reprisals'

AFP , WASHINGTON

The mammoth US trade deficit with China caused political ructions yesterday after new data showed it on course to surpass US$200 billion for last year.

US industry insiders demanded reprisals against China's "predatory" trade policies, while US Trade Representative Rob Portman reiterated appeals for Beijing to relax its currency and open up its markets.

open market

"Our market is very open to Chinese products. It's been good for our economy to have an open trading system," Portman told the CNBC business network.

"But along with that, we need to have the ability also to sell our products on a more level playing field basis in China," he said.

The Commerce Department reported the US trade deficit stood at US$64.2 billion in November, down about six percent from the previous month but still a hefty shortfall in goods and services.

The deficit with China accounted for more than one-quarter of the total November gap, at US$18.5 billion.

That was down about 10 percent from October. But for the 11 months to November, the China deficit reached US$185 billion, and should top US$200 billion including last month.

Portman said a revaluation of China's currency, while not a "silver bullet" for the realignment of Sino-US trade, was an "important" step that Beijing should take.

China must also attack intellectual piracy, he said, arguing US exports are "uniquely disadvantaged" by Chinese counterfeiters because many are knowledge-based products such as software and entertainment.

Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition (AMTAC), took umbrage at the official response in Washington to China's trade advantage.

`Enough is enough'

"Enough is enough," he said, claiming that China "manipulates its currency, subsidizes its banking and industrial sector, and misreports its economic numbers."

AMTAC demanded that Congress pass legislation that would slap hefty tariffs on Chinese imports if Beijing refuses to float its currency.

It said also the US government should withdraw developing country status from China in the World Trade Organization's Doha round of talks, and should instead subject it to much tougher criteria for developed nations.

"It is long past time for US policymakers to recognize that China is a superpower in terms of international trade," Tantillo argued.

"The United States can no longer allow China to use predatory trade practices to destroy US jobs and factories."

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