US panel calls for punitive tariffs on Chinese goods

09 November 2005 18:46  [Source: ICIS news]

WASHINGTON (ICIS news)--A US Congressional commission called on Wednesday for “immediate, across-the-board tariffs on Chinese imports” to halt Chinese violations of US companies’ intellectual property rights (IPR).

 

The US-China Economic & Security Review Commission (USCC) charged in its annual report today that China is not living up to IPR and other obligations necessary for China’s admission to the World Trade Organization (WTO).  The commission also urged the US and other governments to file WTO complaints against the Beijing government.

 

The USCC said China’s failures to enforce IPR rules and its currency manipulations are undermining US economic interests and technological security.

 

The commission, chartered by Congress in 2000 to monitor the national security implications of US-China economic relations, said that “a number of current trends in US-China relations have negative implications for US economic and national security interest.”  The commission called on Congress for “urgent attention” to the issue and immediate changes in US policies toward Beijing.

 

In particular, the USCC cited “China’s continuing failure to meet the requisite standards of effective IPR enforcement,” including criminal enforcement against Chinese companies that counterfeit US products or pirate US technology.

 

US chemical companies are among a broad range of manufacturers who have complained to the USCC of Chinese piracy and counterfeiting.  One US chemical producer in particular complained that after it built a production facility in China, Chinese businessmen used stolen plans to build an exact duplicate factory and also pirated the US firm’s process technology - all without punitive action by the Beijing government.

 

The USCC also singled out China’s currency policies, charging that China is keeping the renminbi (RMB) undervalued.  The commission said China’s move this year to allow the RMB to appreciate by 2% against the US dollar still leaves the Chinese currency “highly undervalued.”  USCC said China should take immediate steps to appreciate the RMB “by at least 25%” against the US dollar or a transparent, trade-weighted basket of international currencies.

 

If China does not act immediately to remedy its currency and IPR shortcomings, said the USCC, “Congress should impose an immediate, across-the-board tariff on Chinese imports at the level necessary to gain prompt action by China.”

 

The commission also called on the Bush administration to join with the European Union (EU) and Japan for a coordinated complaint to the WTO about China’s failure to meet WTO obligations on numerous fronts.

 

China faces a year-end 2006 deadline to meet a variety of trade standards to gain full admission to the WTO.

 

The commission also urged firm US action to penalize Chinese companies involved in proliferation of weapons of mass destruction (WMD) and WMD delivery systems such as missiles.

 

Somewhat ominously, the USCC also cited “an urgent need” for the US to increase its military strength in the Western Pacific “in response to growing Chinese capabilities and deployments in the area.”

By: Joe Kamalick
+1 713 525 2653

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