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Paper urges greater accountability, enforcement, and transparency on trade issues

WASHINGTON, DC - 02/23/06 - Despite three consecutive years of growing US exports to China, the trade relationship between the two countries today "lacks equity, durability and balance" in the opportunities it provides, according to US Trade Representative (USTR) Rob Portman.

The disparity "is due in part to China's failure to honor certain commitments, including its failure to enforce intellectual property rights, its protection and support for certain domestic industries, and its refusal to fulfill certain market opening commitments," Portman said at a recent press conference where he released the results of a USTR review of US-China trade relations.

The 29-page report - US-China Trade Relations: Entering a New Phase of Greater Accountability and Enforcement - is the first comprehensive statement of US trade policy toward China since the country joined the World Trade Organization (WTO) in 2001. 

It assesses US-China trade ties following China's first four years of membership in the WTO and reflects input from private China experts, industry, Congress and US government agencies.

"China has benefited from its access to the world economy," Portman said.  "But in order to sustain that growth, both economically and politically, China must play its part in addressing the global imbalances that have arisen during the past four years of rapid global growth."

According to trade figures released earlier this month by the Commerce Department, the US trade deficit with China in 2005 was $201.6 billion.

Portman stressed the need to monitor China's adherence to international and bilateral trade obligations and "secure full implementation and compliance."

To that end, the report calls for the creation of a China Enforcement Task Force in the Office of the USTR, to be headed by a chief counsel for China trade enforcement.

"Although unprecedented at USTR, I believe this kind of dedicated, country-specific enforcement team is needed to improve China's compliance with its obligations," said Portman.

The USTR also referred to the report's recommendation to expand US negotiating capacity in China by stationing a US trade negotiator in Beijing.

"This is a person who would be in constant communication with US business and Chinese officials, and who would be in a position to strengthen trade enforcement and compliance efforts," the USTR said.

Portman cited the need to work with China's government on the development of standards and an anti-monopoly law. 

The US also plans "to increase efforts to promote regulatory reform in China through deepening high-level dialogue with China's economic planners, will broaden and intensify its assessment of Chinese subsidies and continue pressure on the Chinese government to comply with subsidy-related obligations under the WTO," he said.

"The time has come to readjust our trade policy with respect to China," said Portman, asserting that, "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."

At the same time, he vowed to "use all options available" to compel Beijing to meet its international trade obligations.

Washington is also working closely with other trading partners to address common concerns, the USTR said, citing US cooperation with Japan and Switzerland to seek evidence through the WTO regarding China's intellectual property rights enforcement as well as with the European Union regarding discriminatory tariffs China has imposed on auto parts.

"As a mature trading partner, China should be held accountable for its actions and required to live up to its responsibilities, including enforcing intellectual property rights, allowing market forces to drive economic development and opening its markets. We will use all options available to meet this challenge," said Portman.

He urged China to "take on responsibilities commensurate with its economic heft and the benefits it currently derives from the global trade system," including playing a larger role in the Doha Round of trade negotiations and joining the WTO Government Procurement Agreement and the World Intellectual Property Organization Internet Treaties.

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