1、 1 Friction over trade tests U.S. - China ties By Steven R. Weisman Published: Monday, July 30, 2007 A year after the United States began a high-level strategic economic dialogue with China, the word dialogue hardly seems to apply. In the last eight months, the Bush administration has talked - and t
2、alked and talked - to China about economic issues. But it has also filed legal challenges over Chinese tariffs on auto parts, export subsidies and counterfeiting of videos and DVDs, and it is weighing possible punitive duties on a range of goods. The Chinese charge that the administrations actions a
3、re aimed at placating Congress and that they violate the spirit of the discourse they agreed to join at the behest of the U.S. Treasury secretary, Henry Paulson Jr., last summer. They also express concerns that the administration may be using food safety as a weapon with which to beat them up. But P
4、aulson and other administration officials say the recent spate of tough actions, including those on food and product safety, reflect the maturing of economic ties. We always knew there were going to be problems, even when we started the SED, Paulson said, referring to the strategic economic dialogue
5、. But the SED was never about eliminating the problems； it was about how you manage the problems in a professional way to keep this relationship on an even keel. Congress, meanwhile, is pressing ahead with plans to punish China if it does not improve its record on economic issues, especially the lev
6、el of its currency, which most economists say China is keeping artificially low to make its exports cheaper. Two groups of senators have gotten into a squabble over which committee has jurisdiction over the legislation, which is opposed by the Bush administration. Indeed, U.S. officials frankly hope
7、 that the lawmakers dispute prevents action that would further roil relations with China. To keep the dialogue going, Paulson arrived in Beijing on Sunday for his fourth visit in a year. No other country has focused his attention as much, though as the chief executive of Goldman Sachs before joining
8、 the Bush administration, Paulson took more than 60 trips to China to conduct business. The Treasury secretary said that he would discuss food safety, the environment, currency, reform of capital markets and other issues with President Hu Jintao and Deputy Prime Minister Wu Yi, his counterpart in th
9、e strategic dialogue. 2 China has been hit by unwelcome publicity over charges of tainted pet food, toothpaste and other products. It has started a major revamping of its safety measures, along with a public relations campaign to assure consumers at home and abroad. It also executed its former top f
10、ood and drug regulator over bribery charges. But in a worrisome development for the administration, China appears also to have retaliated against the United States, declaring that it, too, must be vigilant for unsafe American food products. Earlier this month, for example, China suspended the import
11、 of poultry and pork products from several major U.S. producers, including Tyson Foods, Cargill Meat Solutions and Sanderson Farms, charging that they were tainted with bacteria or residues of drugs and pesticides.The Agriculture Department is in the process of inspecting the affected food plants to
12、 try to assure the Chinese of their safety. To many outside experts, the increase in actions against China reflects the political atmosphere in the United States after the elections last November, when many Democrats based their campaigns on criticism of the administrations support of trade deals an
13、d increased trade with China, in particular. This is an exceedingly familiar development, said C. Fred Bergsten, director of the Peterson Institute for International Economics in Washington. What were seeing is an administration that has ignored the problem and then suddenly started to get tough to
14、prove to Congress that it is minding the store. Bergsten said that Paulson, in conversations with him, seems hopeful and halfway optimistic that the Congress wont be able to get its act together and that what he can accomplish will get the administration through the next 18 months.Generally speaking
15、, the administrations tough actions on China have brought both praise and skepticism. The Chinese currency, the yuan, has appreciated 9.4 percent since mid-2005, but congressional critics say it needs to move upward at a much faster rate.Meanwhile, the Commerce Department and the U.S. trade represen
16、tative are taking a more confrontational approach. David Spooner, an assistant commerce secretary for import administration, said this week that while American exports to China were up 32 percent from last year, the administration was pushing for better market access and actions to guard against dum
17、ping of Chinese products, which occurs when goods are sold in U.S. markets at prices below what it cost to make them. The Commerce Department files antidumping actions against scores of countries, but 27 percent of its current antidumping orders are on exports from China, even though China accounts
18、for 15.5 percent of what the United States imports. In addition, in March, the department reversed 23 years of policy and began applying anti-subsidy laws to China. As a result, a flood of manufacturers have filed complaints that China has illegally subsidized its exported goods, including tires, pa
19、per bags, two kinds of steel pipes and steel nails. 3 Spooner testified before Congress last week that China had created a global oversupply in the steel industry and was dumping steel products at below cost. Susan Schwab, the top American trade envoy, has authorized four cases against China with th
20、e World Trade Organization since the end of last year, more than any other country. The cases charge that China has kept tariffs illegally high on imports from the United States of automobile parts and illegally subsidized a myriad of manufactured goods. The trade office has also challenged as insuf
21、ficient a Chinese crackdown on piracy and counterfeited goods and demanded that it give greater access to American copyrighted products that could compete with phony Chinese copies. But Karan Bhatia, a deputy United States trade representative, said these cases should be seen as a complement to, and
22、 not a substitute for， negotiations. He noted that the United States recently persuaded China to protect software from being pirated and won other concessions without litigating the matter with the World Trade Organization. Last week, a joint investigation between Chinese and United States law enfor
23、cement authorities resulted in the arrest of 25 people in China and the seizure of more than $500 million worth of counterfeit Microsoft and Symantec software that was being made there and distributed worldwide. We continue to monitor Chinas compliance with its WTO obligations very carefully, Bhatia
24、 said. Where we have concerns, we talk to the Chinese. Hopefully dialogue will be successful. In a number of cases it has been successful. Paulson said that recently he discussed the increase in trade disputes in China at the White House with President George W. Bush. We both agreed that given the i
25、ssues that come up, some of them very predictable, some not as predictable, we are fortunate to have the dialogue to keep this relationship on an even keel, Paulson said. Commerce and USTR have a job to do, he added, referring to the Office of the U.S. Trade Representative. They need to enforce our laws. But Paulson added that, in his judgment, that is why the strategic economic dialogue needs to look beyond dispute resolution and remind both sides that this relationship is important to both our countries, and to the rest of the world.
