- The Washington Times - Tuesday, May 22, 2007

ASSOCIATED PRESS

The United States and China opened a new round of high-level economic talks yesterday with the leader of China’s delegation bluntly saying that any effort to politicize economic differences between the two nations was not acceptable.

The Bush administration was pushing for concrete results to show to an increasingly restive Congress, where many lawmakers blame America’s soaring trade deficits and job losses on China’s trade practices.

American manufacturers contend that China is manipulating its currency to keep it undervalued against the dollar by as much as 40 percent, making Chinese goods cheaper in the U.S. market and American products more expensive in China. The issue of copyright piracy is another sore point.

The U.S. delegation also raised the issue of food safety highlighted by such incidents as the deaths of pets that had eaten pet food made with tainted wheat gluten imported from China.

U.S. Trade Representative Susan C. Schwab, who briefed reporters on the discussions, said food safety was raised over breakfast by Agriculture Secretary Mike Johanns and Health and Human Services Secretary Michael O. Leavitt.

“They know this is an issue that concerns us and concerns the American people,” said Commerce Secretary Carlos Gutierrez. He said the issue would be addressed more formally in a later session before the talks conclude today.

In opening remarks delivered in an ornate government auditorium decked out in flags from both nations, Chinese Vice Prime Minister Wu Yi cautioned the United States against pursuing a blame game.

“We should not easily blame the other side for our own domestic problems,” Ms. Wu said, speaking through an interpreter. “Confrontation does no good at all to problem solving.”

Ms. Wu, who gained a reputation for tough talk when she was China’s top trade negotiator, said that both sides should “firmly oppose trade protectionism.” She said that any effort to “politicize” the economic relationship between the two nations would be “absolutely unacceptable.”

Ms. Wu and her delegation were to meet behind closed doors with key leaders of Congress, including House Speaker Nancy Pelosi, who has been a vocal critic of China’s human rights policies. Lawmakers are pushing a variety of bills that would impose economic sanctions on China in the wake of a trade deficit with China that last year reached $232.5 billion, accounting for one-third of America’s record deficit of $765.3 billion.

Treasury Secretary Henry M. Paulson Jr. created the Strategic Economic Dialogue last year as a way to get the country’s top policy-makers together twice a year to achieve results that will ease trade tensions. The first meeting was held in Beijing last December.

Breakthroughs at this meeting were expected in the area of cutting tariffs on sales of American energy technology products and services in China and increasing U.S. airline passenger and cargo flights to China.

However, success in another area — getting China to boost the stake that American firms can own in Chinese financial service companies — seemed less certain. The current cap on foreign ownership of Chinese banks is 25 percent.

U.S. officials tamped down expectations of any big outcomes, saying the meetings were not meant to be negotiating sessions.

But Mr. Gutierrez said there was impatience on the U.S. side. He spoke of the “need to make progress in all areas as soon as possible.”

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