October 23, 2003



US Trade Envoy Express US' Concerns on Access to Chinese SoyBeans Market 


U.S. Trade Representative Robert Zoellick warned China that it needs to make faster progress in complying with its World Trade Organization obligations if it wants continued access to U.S. markets.


Briefing reporters during a visit to Beijing, Zoellick said he told Chinese officials that trade needs to be a "two-way street."


He pointed to specific U.S. concerns, including access to the Chinese market for soybeans, China's allocation of tariff-rate quotas and its alleged failure to protect intellectual property.


"This isn't going to be done in a day, but we need to make progress" on China's WTO compliance," Zoellick said. "And we need progress soon."


Zoellick's comments came amid growing tensions between China and the U.S. and Europe over Beijing's trade practices and its huge trade surplus with the U.S. and E.U. countries.


Indeed, the European Union Chamber of Commerce in China issued a 345-page position paper on Tuesday cataloguing what it describes as a disturbing trend by China to use regulations to backpedal on some of the market-opening commitments it made when it joined the WTO in December 2001.


The report, which the E.U. Chamber plans to present to China's Ministry of Commerce Thursday, also accused China of not cracking down on counterfeiters despite its pledge to implement international standards for intellectual property protection.


Counterfeiters Cause Concern


E.U. Chamber Vice president Jan Borgonjon told reporters Wednesday that results of an internal survey found that 83% of chamber members feel that they haven't seen a decrease in the counterfeiting of their brands since 2002.


"The situation on the ground isn't improving and there is a lack of deterrence to counterfeiters," Borgonjon said.


Despite Zoellick's tacit threat to block China's access to U.S. markets, Borgonjon said the U.S. objective should still be to have open markets on both sides of the trade relationship.


"I don't think the goal is to close U.S. markets," he said. "Our goal should be to open the Chinese market."


Zoellick said he came away from meetings with Chinese officials with a "positive sense" about Beijing's recognition of the importance of maintaining the bilateral trade relationship.


As a WTO member, Beijing has promised to lower barriers to imports and allow foreign investors into its banking, telecommunications and other sectors previously tightly guarded.


But recent reports by the U.S. Chamber of Commerce in China and by other trade groups have pointed to problem areas, ranging from failure to issue rules on access to its telecoms market to high capital requirements for foreign banks.


Some U.S. businesses and politicians, along with those from other countries in Europe and Asia, have also criticized China over its policy of maintaining a fixed currency which they allege is pegged too low against the U.S. dollar.


They allege the policy makes Chinese products unfairly cheap compared with goods made in other countries.


Chinese leaders have said they plan to eventually liberalize the yuan policy, but not in the near future.


Growing Trade Imbalance


China's President Hu Jintao agreed during a recent meeting with President George W. Bush at the Asia Pacific Economic Cooperation forum in Bangkok to set up a committee of experts to study how China might reform its currency policy.


China's trade surplus with the U.S. reached $103 billion last year and could surpass $130 billion this year.


The E.U.'s trade deficit with China, meanwhile, exceeded $55 billion last year.


But Canada's Prime Minister Jean Chretien dismissed U.S. complaints that the Chinese currency is undervalued and an obstacle to free trade.


Making his sixth visit to China, Chretien told reporters in Beijing that the yuan's value wasn't an obstacle to Canadian trade.


"You know, we have been trading with them. Their currency has been quite stable and we're doing quite a lot of business," Chretien said.