US charges China with hitting brakes on free trade

AFP ^ | Thu Apr 1, 2:13 PM ET | AFP

[hedgetrimmer]

A container ship makes its way through Hong Kong waters as it leaves the territory. China hit the breaks on a free trade drive in 2003, the US charged in an annual report.(AFP/File/Peter Parks)

China hit the brakes on a free trade drive in 2003, jamming up the process in a bureaucratic mangle, the United States charged in an annual report released.

China had removed many obstacles to commerce since joining the World Trade Organization (news - web sites) in December 2001, the US Trade Representative's (USTR) office conceded in a key global report.

But "substantial barriers" remain, said the 2004 National Trade Estimate on Foreign Trade Barriers, noting that the US-China trade gap in 2003 amounted to 124.0 billion dollars, a quarter of the total US deficit.

"Some agencies have renewed efforts to erect new technical barriers to trade," it complained.

"In many sectors, import barriers, opaque and inconsistently applied legal provisions and limitations on foreign direct investment often combine to make it difficult for foreign firms to operate in China."

Beijing tried to shelter weak industries from foreign competitors, and its bureaucrats apparently could not resist interfering in the market economy, USTR said.

"Despite its remarkable transformation over the past quarter century, China continues to suffer from its command economy legacy," Washington charged. This, it said, was impeding the penetration of US firms into China.

China had traditionally restricted imports with steep tariffs, taxes and other measures, the United States said.

In the first year after joining the WTO, it slashed tariffs on many products, and allowed Chinese companies to engage in freer trade.

But in 2003 "bureaucratic inertia and a desire to protect sensitive industries contributed to a significant loss of the momentum created in the first year of China's WTO membership."

China was sticking to its policy of pegging the yuan at 8.28 to the dollar, the USTR said, a policy blamed here for keeping the yuan artificially low and pricing US goods out of the Chinese market.

"Serious engagement on this issue will continue in 2004," the USTR said.

On trade, the United States faulted China for:

-- Failing to meet its commitment to give trading rights to all foreign joint ventures with foreign investors.

-- Trying to obstruct trade by means other than tariffs. "In fact, several national officials have stated openly in the state-run media that China should manipulate technical standards to limit imports."

-- Failing to protect intellectual property rights (IPR). Enforcement of IPR laws was "seriously inadequate," the report said, noting a US estimate that the value of counterfeit goods in China amounted to 19 billion to 24 billion dollars. Estimated US losses exceeded 1.8 billion dollars a year.

Despite "periodic" campaigns, "counterfeiting and piracy remain rampant," it said.

-- Using opaque methods to decide on quotas for imports of US wheat, corn, rice, cotton, wool, sugar, vegetable oils and fertilizer.

-- Demanding an impossible target of zero pathogens for imports of uncooked meat and poultry, resulting in the closure of four US plants. The United States could not re-open the factories because the Chinese were asking for problems to be corrected "when US authorities believe none exist."

On March 18, United States launched the first World Trade Organization complaint against China, attacking tax breaks for the local microchip industry that made it hard for American firms to compete.

[hedgetrimmer]

China has tariffs, trade barriers and non tariff barriers that they exercise with impunity. If one American citizen voices the concern that we do not protect our national security with judicious application of tariffs, he is excoriated by the "free trade" crowd. The problem is, the "free trade" crowd keeps crowing about free trade, but no one is practicing it, except the little guys who are forced into the free trade agreements being forged in the WTO because our Congress no longer as the authority to negotiate trade.

[hedgetrimmer]

PING

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[ASTM366]

LETS TELL THE CHICOMS TO TURN AROUND EVERY DAMN SHIP THAT IS DELIVERING GOODS FROM THEIR COUNTRY TO OURS.

WE'LL SEE HOW LONG THEY LAST.

WE DON'T NEED THEIR PRODUCTS. PERIOD.

[WilliamofCarmichael]

Stopping the ships may not be enough -- as if Wal-Mart, et al. would allow us to do that.

The Chi-coms' leading home appliance manufacturer, Haier, a super-large State-owned enterprise (SOE) has opened Haier America including a factory in Camden, S.C. Haier is a major supplier to Wal-Mart and other major retailers. I have not googled much about the factory so I don't know how it can be competitive without offshoring to China. :)

China's economic reforms ("You want to do business in China? Give us your technology") made it all possible for Haier to become one of the world's biggest, plus its tough CEO. Liebherr, a German appliance maker provided the initial technology in the 1980s. Gee, I wonder what their sales are like in China today?

Haier Group's CEO Zhang Ruimin is a member of the Chinese Communist Party's Central Committee and Communist Party member since 1976.

[AmericanVictory]

If they were to actually comply, the would have to both reduce the role of Party functionaries in making such things as loan decisions and ultimately reveal the several hundred billion in bad loans that their banking system because of a history of such decisions. It's a real problem for them.