US agency seeks multiple WTO complaints against China

25 March 2005 21:03  [Source: ICIS news]

WASHINGTON (CNI)--The US-China Commission (USCC) urged the Bush administration Friday to file multiple complaints against China in the World Trade Organization (WTO) for “undermining US economic interests.”

 

The USCC, a US government agency chartered by Congress, charged today that China is in violation of its WTO obligations on several counts, particularly in the continued under-valuation of its currency and “weak enforcement of intellectual property rights (IPR) protections.”

 

In a broad series of recommendations sent to Congress today, the USCC cited testimony of witnesses that appeared at the commission’s 3-4 February public hearing, arguing that “US government efforts to move China to address these serious problems have not achieved satisfactory results.”

 

The Bush administration, said the USCC statement, “has not effectively utilized available US anti-dumping laws and China-specific import safeguards to counter China’s unfair trade practices.”

 

US chemical companies are among those who have complained to the USCC and the Bush White House about Chinese trade practices and what many consider wholly inadequate IPR protections in China.  One chemical company cited earlier by the USCC found that Chinese competitors had duplicated the US firm’s production facility in China using pirated construction plans and the US company’s proprietary production processes.

 

USCC chairman Richard D’Amato said in a statement: “It has become increasingly clear that China is not meeting key commitments it made when joining the WTO, and that our trade laws have to date been insufficient in addressing these problems.” The end result, he said, “has been a trading relationship that is undermining important US economic interests.”

 

The USCC recommends that Congress press the White House to file one WTO complaint against China regarding China’s exchange rate practices.  “China’s exchange rate practices violate a number of its WTO and IMF [International Monetary Fund] membership obligations,” USCC said, “including the WTO prohibition on export subsidies and the IMF proscription of currency manipulation.”

 

“China’s undervalued currency,” the USCC added, “has contributed to a loss of US manufacturing, which is a national security concern for the US.”

 

The commission also recommended to Congress that the US Trade Representative (USTR) “immediately file one or more WTO disputes pertaining to China’s violation of its WTO IPR obligations, particularly China’s failure to meet the requisite standards of effective enforcement, including criminal enforcement.”

 

The commission also complained of “China’s system of government subsidies for manufacturing, including tax incentives, preferential access to credit and capital from financial institutions owned or influenced by the state, subsidized utilities and investment conditions requiring technology transfers,” all of which may also be actionable before the WTO, according to the USCC.

 

The USCC was chartered by Congress in 2000 to monitor and investigate the national security implications of the US-China trade relationship and to make recommendations to Congress for legislative or regulatory action.

By: Joe Kamalick
+1 713 525 2653

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