Posted on 05/02/2005 6:08:43 PM PDT by TigerLikesRooster
Posted: 02 May 2005 0751 hrs
WASHINGTON : The United States put China on notice this past week that its patience is running out on a host of trade complaints.
With the European Union also growing more exasperated with Asia's second-biggest economy, the scene would appear set for a showdown over trade unless Beijing has a change of heart.
The West has long complained that China's yuan currency is under-valued, giving an artificial boost to Chinese exports and fuelling a massive surplus in China's trade position.
But while the United States and its EU partners are largely powerless to effect change on the foreign exchange front, they can take action on other bones of contention.
Action came during last week with both the US and EU launching consultations that could lead to restrictions being slapped on Chinese garment imports, which have gone into overdrive since global textile quotas were abolished on January 1.
Then on Friday the US Trade Representative's office, unveiling an annual report on protection of intellectual property rights, put China on a blacklist of 14 countries guilty of "rampant" copyright abuses.
Complaints of copyright piracy have been a mainstay of US trade policy for years with officials complaining that too little is being done to stop the manufacture of fake US goods in black-market Chinese factories.
But for the first time, the USTR gave an explicit warning that Washington could sue China at the World Trade Organisation unless Beijing cracks down on the counterfeiters.
Analysts say that President George W. Bush's administration is growing more assertive towards China as the war on terrorism retreats in relative importance and older disputes in the bilateral relationship return to the fore.
In part, it is argued, the White House is acting under pressure from Congress, where many lawmakers say the world's most populous country has gained an unfair economic edge and needs to be reined in.
"We're probably headed for some heavy weather in US-China trade relations. And frankly, it's high time for the US to get tough with the Chinese," John Tkacik, a Washington-based China expert at the conservation Heritage Foundation, told AFP.
At 162 billion dollars, the US trade deficit with China was a quarter of the country's total trade shortfall last year.
Critics, both Democratic and Republican, say the cost of that deficit is being measured in American jobs. US textiles factories had 14,000 workers fewer in March compared to a year before.
China, the argument runs, has had a free rein for too long to dump as many goods as it likes on the United States while refusing to open its own markets fully to US imports. Much the same grumbling was heard in the 1980s when Japan seemed set for global economic dominance.
China, however, as one of the biggest holders of US Treasury bonds is therefore is a major provider of the cash needed to sustain Americans' insatiable desire for imported goods.
Tkacik, however, said any talk of China throwing global financial markets into havoc by dumping Treasuries in retaliation for US action on the trade front was "bluff and bluster from the Chinese".
"It makes no sense to dump them as they'll just lose out massively themselves financially. And if they can't sell Treasury bonds, what else is there for them to do?" he said.
China has reacted furiously to the mounting trade pressure but has stopped short of spelling out any tit-for-tat action it might take.
Senior officials in Beijing have said that any efforts to restrict Chinese exports would be a violation of free trade, would smack of protectionism and violate the principles of the WTO.
China is not without its supporters in Washington. Major clothes retailers and importers are up in arms over the pressure for curbs on Chinese textile shipments.
More broadly, the clamour for textile restrictions is being tolerated by an administration that says free trade is one of its most pressing priorities, with the WTO's "Doha round" of negotiations approaching its climax at the end of this year.
"Worst of all, this isn't the auto or semiconductor industry, fields where the United States and Europe can actually claim that economic stability is at stake. Our domestic textile sectors have been on the decline for years," commentator Clay Risen wrote in the influential liberal journal The New Republic.
"It's not the end of the world if Washington, Paris, and Brussels follow through on their threats to reinstate textile quotas. Just don't be surprised if the next time we make a push for free trade, the rest of the world decides not to play along," he said.
- AFP /ch
Ping!
break the currency peg now!
FROM THE ARTICLE..."We're probably headed for some heavy weather in US-China trade relations. And frankly, it's high time for the US to get tough with the Chinese," John Tkacik, a Washington-based China expert at the conservation Heritage Foundation, told AFP."
Man am I confused...here is a CONSERVATIVE...who thinks we need to get tougher with China...who is apparently worried about the yuan peg and its effect on our trade deficit with China. Ya mean China aint playin fair?
We were told to ignore Paul Craig Roberts, Lou Dobbs, etc, read all those ad hoc economic / poitical articles..and listen to some of our resident experts on this forum who tell us that trade deficits are a good thing...that we are only giving paper to China...they give us stuff...nice cheap stuff and lots of it.
Hmmmm...who to believe...
Daddy Bush pushed for China's entrance to the WTO and W made it permanent. It was always a bad idea.
Now it's coming back to bite them in the butt.
China needs to play fairly.
They need to release the yuan.
With the yuan pegged, American companies can't compete. What the Chinese are doing is cheating.
I think we need to enact a 100% tarriff on Chinese goods and/or enact severe quotas on their goods as well unless they release the yuan. I'm all about free trade, as long as everyone plays fairly.
China's gonna retaliate by refusing to reign in it's mad dog, NK.
We can handle North Korea.
us.
;0)
I doubt that the US and the EU will be on the same page. If the US moves against China, look for the EU to cozy up to them and buy lots of Chinese imports.
Not to worry, "free traders." The Chi-coms will be spreading money around and they already have the hearts and minds of the New Democrat Third Way progressives and their mainline (Rockefeller?) Republican "free trader" partners.
China, however, as one of the biggest holders of US Treasury bonds is therefore is a major provider of the cash needed to sustain Americans' insatiable desire for imported goods.
Insatiable desire for imported goods?! Excuse me!
It's a desire for American goods which used to be produced here until useful idiots gave away the technology for a few pieces of silver and a promise of a billion-plus market. Now you know why Lenin called them useful idiots.
BTW, who else is on that IPR watch list? One google news item reports, "Fourteen US trading partners are on the 2005 'priority watch list' meriting close attention to IPR problems: Argentina, Brazil, China, Egypt, India, Indonesia, Israel, Kuwait, Lebanon, Pakistan, the Philippines, Russia, Turkey and Venezuela."
There is no insatiable desire for imported goods; there is only the desire for cheeeeeeep goods. Rollback baby. Made for 50 cents an hour or ???
hardly. for example, Europe takes their textile industry very seriously. Europe makes the finest clothing in the world, especially Italy. and they do not want to lose that industry to chinese manufacturing.
But isn't Europe already losing its textile industry to China, just like we are? I know that they will not like it, but they seem to always come down on the side opposite the US, as if they want to encourage an America-beating alternate power. China will do, if they're the winner. The EU wants to be on the side of the winner, and there is no built-in sympathy for the tyrannical USA.
Here's the link for the full report: http://www.ustr.gov/assets/Document_Library/Reports_Publications/2005/2005_Special_301/asset_upload_file195_7636.pdf Ukraine is the only "priority country" to be classified as such by USTR. I'm amazed that China's only on the " watch list." Why? Politics?
Here's the link for the full report: http://www.ustr.gov/assets/Document_Library/Reports_Publications/2005/2005_Special_301/asset_upload_file195_7636.pdf Ukraine is the only "priority country" to be classified as such by USTR. I'm anazed that China's only on the " watch list." Why? Politics?
Sorry about the hiccup
Hard to sell all those old T-bills with interest rates going up...
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