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Fri, Apr 02, 2010 - Page 10 News List

USTR report takes aim at China

REUTERS , WASHINGTON

China retains a raft of non-tariff barriers, including tax rebates and quotas, that discriminate against foreign manufactured and farm goods, the US Trade Representative’s (USTR) office said on Wednesday in its annual report to the US Congress.

The report, along with two new spotlights on technical barriers to manufactured goods and farm exports, comes at a time of rising economic tensions with China over Beijing’s exchange rate policy and an import substitution campaign.

However, the trio of reports, which comprise about 600 pages of trade irritants with more than 60 countries, did not include any mention of China’s currency policy.

US President Barack Obama faces intense political pressure to label China, in a semi-annual report slated for April 15, as a currency manipulator for keeping the yuan artificially weak, making it hard for US firms to compete.

Not mentioning the currency policy in the USTR report could upset congressional Democrats who want the Obama administration to pressure Beijing on the issue, said Scott Lincicome, a trade lawyer with White & Case in Washington.

“It gives me hope that the whole currency issue is not going to devolve into some sort of tit-for-tat trade war,” Lincicome said.

China has denied it is manipulating its currency and warned it will retaliate if its goods are hit with duties.

The USTR report covered longstanding concerns by US businesses about counterfeiting, export subsidies and taxation policies that tilt the playing field to favor Chinese firms.

The report described the hot-button issues of Internet censorship and technology policies that discriminate against foreign firms operating in China — but removed specific references to Google Corp that had been part of the previous year’s report.

“Chinese government authorities may issue lists of banned search terms or banned sites weekly, with little justification or means of appeal, putting Internet-enabled services in a precarious position,” the USTR report said.

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