High-Level Talks Focus on US-China Trade Dispute

High-Level Talks Focus on US-China Trade Dispute By Patrick Goodenough CNSNews.com Pacific Rim Bureau Chief October 28, 2003

Pacific Rim Bureau (CNSNews.com) - U.S. Commerce Secretary Don Evans is holding talks with senior Chinese officials Tuesday on a deepening trade dispute that may lead to punitive steps against Beijing unless it is resolved.

In a statement ahead of his meetings with Chinese premier Wen Jiabao and others in Beijing, Evans said China's trade practices were "creating an unfair advantage that is undercutting American workers."

"China needs to create an economic system that is more transparent and one that allows capital to flow freely in response to market forces," he said. "America and the world have a strong interest in seeing China succeed. China's success begins with fair trade."

They claim Beijing is keeping its currency, the yuan or renminbi (RMB), low against the U.S. dollar, as a tactic to boost Chinese exports to the U.S., by making Chinese products cheaper on world markets than they realistically should be.

U.S. officials, manufacturers and some members of Congress have blamed China's failure to allow the RMB to float freely for last year's record trade deficit, estimated at $103 billion, and for growing unemployment in the U.S.

They also want China to live up to its World Trade Organization commitments, to loosen controls on some imports and clamp down on rampant violations of intellectual property rights, includining the sale of fake CDs, software, pharmaceuticals and other products.

A telling example of China's failure to protect intellectual property rights, cited recently by Evans, relates to Wrigley's chewing gum, which has a 70 percent share of the Chinese market.

Evans said in a speech in Detroit last month that counterfeiters in Guangzhou had copied Wrigley's products, but didn't stop at selling the pirated gum.

"They copied the Wrigley truck. They drove Wrigley's distribution routes. And when they called on Wrigley's accounts, the pirates paid 'premiums' to the shopowners for accepting the counterfeit gum."

Heritage Foundation research fellow John Tkacik said in a report last week that estimating the value of revenue lost because of piracy was an inexact science.

Even so, he added, "Revenue lost due to piracy in China is in the billions of dollars, even by the most conservative estimates."

The Xinhua news agency last Friday quoted the head of China's intellectual property rights watchdog body, Wang Jingchuan, as saying legal action against pirates had increased by almost 18 percent last year.

"The legal authorities and administrative bodies worked in close cooperation with each other and fought against intellectual property rights infringement, which indicates China's resolve to fulfill its pledges to other WTO members," Wang said.

Evans' visit follows one by U.S. Trade Representative Robert Zoellick, who warned China last Wednesday that its access to U.S. markets depended on "fair" two-way trade.

President Bush himself raised the currency issue with President Hu Jintao at a meeting on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum in Bangkok last week.

They agreed to send the issue to a joint panel of experts, although Hu told businessmen separately that keeping the RMB's value stable was the right policy for China.

Chinese central bank governor Zhou Xiaochuan was quoted by the official China Daily Monday as saying China would resist "U.S. pressure for a revaluation."

Treasury Secretary John Snow recently warned that the artificially low exchange rate -- the RMB is pegged at roughly 8.28 to the dollar -- gives China an unfair trade advantage and impacts negatively on the U.S. job market.

Some U.S. lawmakers want to apply tariffs on Chinese imports unless Beijing lets market forces determine the exchange rate and takes other steps to free up trade.

Heritage analyst Tkacik warned, however, that the impact of U.S. tariffs should be carefully considered.

"Across-the-board tariffs on Chinese goods would significantly raise prices for U.S. consumers," he wrote in the report.

A more effective response than applying retaliatory tariffs would be for the government to direct trade representative Zoellick to prepare a formal complaint against China at the WTO, he said.

The Texas-based independent analysts, Stratfor, argued that pressing trade sanctions against China could be risky for the Bush Administration.

"This could lead to a backlash by politically powerful U.S. manufacturers such as General Motors and General Electric, who are anxious to get in on the China boom but could suddenly find themselves locked out if Washington imposes sanctions and China retaliates," it said in a briefing Friday.

"The Bush administration could be forced to either face down Congress and oppose sanctions, or to go along with lawmakers and risk opposition from many of its key corporate political backers."

According to the associate director of the Cato Institute's Center for Trade Policy Studies, Daniel Griswold, American families clearly benefit from trade with China.

"The clothing, furniture, toys, and electronics that make up a big chunk of Chinese imports keep prices down in American stores and raise the real wages of American families, especially those with middling or low incomes," he wrote in an article on the Cato website.

Griswold said any attempt to erect barriers to trade with China would damage the U.S. economy, and undermine security too.

He disagreed with those who believe enriching China through trade will threaten U.S. security, arguing that putting the brakes on China's economic growth, would cause hardship for hundreds of millions of Chinese.

"A poor, stagnant, and frustrated China would be more unstable and hostile to American interests than an energetic and prosperous one," he argued.

In an article published in China Daily at the weekend, Yin Yue of the China University of Political Science and Law argued that the dispute was political rather than economic.

Noting that 2004 is an election year, Yin said China has become "the victim of U.S. domestic politics."

China specialist Prof. Jian Yang of the University of Auckland agreed Tuesday that many in China saw the dispute in political terms.

"The Chinese believe the U.S. side has exaggerated the impact of Chinese exports on U.S. jobs and the Bush Administration is driven by election politics," he said.

On the other hand, even if Beijing decided it was necessary to revalue the RMB, it would not likely do so in a dramatic fashion, lest it be seen as "too weak."

Yang said some Chinese felt their government was entitled to take little or no action, since China's decision not to revalue its currency during the 1997 Asian financial crisis helped other countries, including the U.S.

Asked to predict an outcome to the row, Yang said he doubted it would be allowed to reach a point where it was allowed seriously to damage bilateral relations.

"After all, this is a negotiable issue although the Chinese say it is a matter of sovereignty," he said.

China would eventually adjust its policy, although changes would likely to "gradual and experimental" in nature.

"The dispute may last a while as the White House wants Beijing to move fast and it is facing pressure from various forces.

"Beijing may move faster under strong pressure. However, the White House should understand how far and how fast China could go," Yang said.

"Evans said in a speech in Detroit last month that counterfeiters in Guangzhou had copied Wrigley's products, but didn't stop at selling the pirated gum.
"They copied the Wrigley truck. They drove Wrigley's distribution routes. And when they called on Wrigley's accounts, the pirates paid 'premiums' to the shopowners for accepting the counterfeit gum."
Heritage Foundation research fellow John Tkacik said in a report last week that estimating the value of revenue lost because of piracy was an inexact science.
Even so, he added, "Revenue lost due to piracy in China is in the billions of dollars, even by the most conservative estimates."

Message to Griswold, get a piece of this. My CEO thinks that the wimpy little bits of tightening of borders, customs and export regs post 9/11 is a "knee jerk reaction." Yeah, you and he are in the same cabal. Well here's my knee jerk reaction to idiocy: Tell you what, why don't you turn in your US Passport and get on the next flight to Shanghai, friggin' globalist, anti patriotic, anti national scum.

Evans' visit follows one by U.S. Trade Representative Robert Zoellick, who warned China last Wednesday that its access to U.S. markets depended on "fair" two-way trade.

Your friend Robert Zoellick at it again. It must of killed him to say "two way trade" as I can't recall him mentioning that before.

Heritage analyst Tkacik warned, however, that the impact of U.S. tariffs should be carefully considered. "Across-the-board tariffs on Chinese goods would significantly raise prices for U.S. consumers," he wrote in the report. A more effective response than applying retaliatory tariffs would be for the government to direct trade representative Zoellick to prepare a formal complaint against China at the WTO, he said.

Bump

"A more effective response than applying retaliatory tariffs would be for the government to direct trade representative Zoellick to prepare a formal complaint against China at the WTO, he said. "

Wow - A formal complaint! that ought to get their attention.

Ooooh! A FORMAL complaint! Gosh, they had better be sure to print it on the extra high quality, extra soft paper. That way, when the Chinese go to wipe their @$$es with it, they won't scratch their tender posteriors.

Someday, somehow, we will have a government that actually represents American interests. I keep telling myself that. It keeps me from losing my f**king mind.

We must resolve this disagreement, so that we can rely on the red Chinese communists even more for our high tech and manufactured needs.

The longer it takes to resolve this disagreement, means that much longer that we will have to employ an american citizen in a job over here to do the work instead of providing a job and income to a chinese commie.

It is critical that we move as many of our jobs and factories to communist china as quickly as we can. This disagreement could potentially cause a slow down in the number of layoffs in America.

Write your congressman, and the president

Instead institute the retaliatory tariffs per Adam Smith's discussions on trade.

I my opinion the best would be moderate non-punitive tariffs. For example 10% under the name of "foreign sales" tax. This money could be used to generate American jobs. Such low tariffs would allow good trade relations and could be raised or lowered according to the national need. Easy does it.

That's true. Why I remember the 1940s, 1950s and expecially the 1960s and 70s. Few Americans could afford to buy clothes. Almost no one had furniture and toys. There was a National Enquirer article as I recollect allegding that some American owned electronics. I sure don't want to return to those days. To hell with our trade deficit, lost jobs, domestic corporations going out of business. . . . Cheap toys are more important.

"A poor, stagnant, and frustrated China would be more unstable and hostile to American interests than an energetic and prosperous one," he argued.

This was the liberals' argument for helping the Soviets. The liberals did not prevail and we won the Cold War. Hmmm.

The Bush administration has put sanctions -- against the will of the "pro-China" group in government (still don't know who they are) -- on Chicom/PLA companies like Norinco. Perhaps they will do something. But this time they face oppostion from the pro-China insiders and "American" corporations who are helping China and Wall Street to grow strong.

I sure remember the "Made in Japan" products shortly after W.W.II.

I personally do not remember Japan's "Made in usa." According to http://www.snopes.com/business/genius/usa.asp

it is never happened. It's false.

There is the Japanese city of Usa (on the island of Kyushu), however. It was not invented. It existed long before "Made in ..." labels.

Oh, yes, by cracky. Had to walk to school 10 miles in the snow because we could not afford a *bicycle* and using rags wrapped around my feet for we could not afford *shoes*! Instead of *coffee cups* we were forced to use old soda cans! And indeed, instead of *Christmas lights* we simply lit a bunch of those rags on fire soaked in grease! ;)

The main pro-China group are people like 95 plus % of those on my management team, who threaten to support the Dimocraps if Bush is not an unrepentent globalist lap dog. Just the other day, our CEO labelled the totally wimpy and inadequate slight tightening of borders and export licenses as a "knee jerk reaction." With "friends" like these, now you can see why all of the lap dogs in our government are so afraid to stand up for our national interests; corporate interests are far more interesting!

"Across-the-board tariffs on Chinese goods would significantly raise prices for U.S. consumers,"

We can't let the Free Traitors change the argument. The tariffs accomplish three things, (1) Buy American, (2) bring in revenue for the State, (3) reduce the financing of the Chinese Military by US buyers. When the Free Traitors complain about the raised cost of foreign goods, they deliberately refuse to acknowledge that money out of this country is money lost, that the Chinese are the enemy of freedom, that an unemployed US worker sucks off the teat of government who turns around and plunders the taxpayer, and most importantly tariffs replace onerous taxes designed to penalize productivity in the US

The Free Traitors really wish to undercut US influence, they wish to bolster enemy country economies, they want the US to become more indebted to foreign nations, they also want to shift more and more tax burden on the Producer, not the Consumer - IOW, Free Traitors want to punish productivity in the US, reward and subsidize productivity everywhere else in the world. They also deeply desire to subsidize crass consumerism no matter how much it destroys this country's economy, culture and soveriegnty.

The truth about the skullduggery of the Anti-American Free Traitors needs to be told.

The main pro-China group are people like 95 plus % of those on my management team, who threaten to support the Dimocraps if Bush is not an unrepentent globalist lap dog.

Well Duh, management gets their Marxist egalitarian ideas from college. They are propagandized by the Leftists to hate America and worship instant gratification.

Be thankfull that these traitors and seditionists are outnumbered. When management talks about laying off American employees to subsidize Chinese Communists AND they talk about voting Demoncat because the Demoncats hate American too, then you can't ask for a better reason for the scared employees to counter these Benedict Arnolds with a across-the-board pull for the GOP.

Someday, somehow, we will have a government that actually represents American interests. I keep telling myself that. It keeps me from losing my f**king mind.

Can anyone here recall any culture or country where the politicians and business leaders did everything in their power to destroy their own people and build up all of their neighbors?

"Across-the-board tariffs on Chinese goods would significantly raise prices for U.S. consumers,"

We can't let the Free Traitors change the argument. The tariffs accomplish three things [...]

10% or 15% tariff would not be punitive and would not raise price so much. Free traders are hypocritical - they do not care about consumers any more that they care about workers, they care only about their short term profits and if they could they would raise the price through the roof. And when the domestic production is eliminated, they may!

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