- The Washington Times - Tuesday, April 2, 2002

China filed a case in the World Trade Organization last week in response to President Bush's imposition of heavy tariffs on imported steel, marking the first time China had used the international trade body's dispute-resolution procedures since it joined in December.
By contrast, the Bush administration says China has failed to live up to certain WTO rules, especially in the area of agriculture. But U.S. Trade Representative Robert B . Zoellick, emphasizing quiet diplomacy, has refrained from filing any cases.
China's decision came after similar action taken by Europe, Japan and other Asian countries that were the main target of Mr. Bush's action on March 5, which led to duties of up to 30 percent.
"Trade protectionism is becoming a tidal wave as the world economy becomes bogged down with difficulties," Shi Guangsheng, China's minister of foreign trade and economic cooperation, said yesterday in Beijing. "Advanced economies which once preached free trade are now undermining free trade."
China took the first step toward a WTO case on March 26 by requesting formal consultations with the United States. If China is successful in challenging the steel tariffs in the WTO, a process that could take up to two years, the United States would come under heavy pressure to compensate China for lost trade.
The Bush administration has argued that its "safeguard" action to protect American steel companies is consistent with trade rules and has promised to fight any WTO case.
The Chinese case marked the one unusual twist in the Asian giant's four-month membership in the WTO, which took effect Dec. 11 after 14 years of negotiations. Many observers expected conflict with trading partners as China failed to live up to the complex WTO rules covering agriculture, services and intellectual property, especially since China repeatedly violated bilateral accords with the United States before it joined the global-trade group.
But few fireworks have materialized.
"There have been some tempests in teapots so far," said Nicholas Lardy, an economist with the Brookings Institution who studies China. "But nothing really surprising has happened so far."
Mr. Zoellick so far has pursued a low-key approach toward obtaining China's compliance with WTO rules.
"When we identify a problem, we will look for ways not merely to highlight it, but to resolve it," he said in a Jan. 31 speech. "This will not always involve unleashing legions of lawyers to take advantage of the WTO's dispute settlement mechanism, though we will not flinch from doing so if other courses do not produce results."
As a result, Mr. Zoellick's office has made numerous presentations to trade diplomats from the WTO's 143 members pointing out China's shortcomings. According to the weekly newsletter Inside U.S. Trade, American officials have complained that China is not opening its market properly to foreign agricultural products and insurance services.
Negotiators from Mr. Zoellick's office and from the Department of Agriculture also have made several trips to Beijing to impress upon Chinese officials the importance of living up to its promises in the WTO, Mr. Lardy said.
The most persistent irritant between China and the United States has been agriculture.
The initial problem was forthcoming Chinese regulations on genetically modified food products that would have locked U.S. producers out of the market. China subsequently postponed the rules under pressure from Mr. Zoellick and Agriculture Secretary Ann M. Veneman.
Now, U.S. officials are wrestling with China over its refusal to issue new import quotas for agricultural products, which would have a similar effect on American farmers.
"This lengthy delay … calls into question China's good faith commitment to timely adherence to its WTO market access obligations," Sen. Charles E. Grassley, Iowa Republican, said in a Thursday letter to Chinese Ambassador Yang Jiechi.


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