Differences haunt U.S.-China trade

The United States and China this week will look to head off a series of escalating economic disputes when top trade officials meet in Washington.

The Bush administration wants commitments that China will crack down on illegal reproduction of products like software, designer clothes and drugs, reconfigure tax and technology policies that can raise prices of American goods in China, and loosen restrictions that choke off the sale of American products to Chinese consumers.

China has its own list of grievances, and is especially bothered by the way U.S. trade rules allow American companies to petition their government for relief from cheap Chinese imports.

The sides will hear each other out tomorrow at the U.S.-China Joint Commission on Commerce and Trade, a body set up in 1983 to strengthen economic ties. Commerce Secretary Donald L. Evans, U.S. Trade Representative Robert B. Zoellick and China’s Vice Premier Wu Yi will lead the meetings.

“We have a lot of trade with China, that means we will have a lot of issues,” said Josette Shiner, deputy U.S. trade representative.

The administration is under increasing election-year pressure to get tough with China on some of those issues as the trade deficit rises — to almost $124 billion last year — and many U.S. companies and workers complain about unfair competition.

The AFL-CIO, the nation’s biggest labor federation, last month demanded that the Bush administration slap China with trade sanctions because of workers’ rights violations. A group of manufacturers is expected to ask the administration to target China for currency manipulation. And a range of U.S. producers, from shrimpers to a color TV maker, have complained about China selling products below cost to grab market share.

Lawmakers also have demanded a tougher line. In one instance, Rep. Phil English, Pennsylvania Republican, and Sen. Susan Collins, Maine Republican, last month pressed legislation that would make it easier for U.S. companies to block China’s exports.

Mr. Zoellick last month filed the first case against China at the World Trade Organization, over a tax system that hurts U.S. semiconductor manufacturers, and the administration last year signed off on a narrow range of trade restrictions on China-made apparel.

But the administration also sees China as one of the few fast-growing markets for American exporters.

While U.S. exports worldwide have decreased by 9 percent during the past three years, exports to China have increased by 76 percent, the USTR said.

“For many of our industries it’s a critical area of success,” Mrs. Shiner said.

So the preferred tack to resolve the issues remains negotiations, rather than litigation.

The administration is especially hopeful of tangible commitments this week to crack down on intellectual property abuses, and China has hinted it might agree to resume imports of beef following a case of mad cow disease discovered late last year, and increase U.S. software purchases.

But it is not clear if either side will be able to offer the concessions necessary to strike wide-ranging deals this week that would placate critics.