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U.S. Takes Tough Trade Stance With China

ROBERT SIEGEL, host:

You're listening to ALL THINGS CONSIDERED from NPR News. Today the Bush Administration announced plans to get tougher with China over trade. Trade officials unveiled the results of a six month long review of the nation's trade relationship with China. It is the first such review since China joined the World Trade Organization back in 2001. NPR's Kathleen Schalch reports.

KATHLEEN SCHALCH reporting:

U.S. trade representative Rob Portman says the commercial relationship between the U.S. and china is now entering a new phase. China made commitments to open its market when it joined the WTO, and deadlines for implementing these reforms have now come and gone, Portman says.

ROB PORTMAN (U.S. trade representative): As a mature trading partner China should be held accountable for it's actions and required to live up to its responsibilities.

SCHALCH: China's economy has matured at breathtaking speed, becoming one of the largest in the world. It's now running the world's biggest trade surplus, and last year its surplus with the U.S. climbed to more than 200 billion dollars. That's the largest trade gap the U.S. has run with a single country ever.

Mr. PORTMAN: This disparity is due in part to China's failure to honor certain commitments, including its failure to enforce intellectual property rights, its protection and support for certain domestic industries, and its refusal to fulfill certain market opening commitments, all of which play a role in the record bilateral trade deficit figures.

SCHALCH: The reports says USTR will shift its priorities. It's creating a new taskforce dedicated to preparing and handling trade cases that the U.S. may want to bring against China in the WTO. It's adding a new chief counsel for China trade enforcement and plans to post a senior trade official in Beijing for the first time. The U.S. will also cooperate with Japan and the European union to try to ratchet up the pressure. Some members of Congress remain skeptical, including Maryland Democrat Ben Cardin.

Representative BENJAMIN CARDIN (Democrat, Maryland): Well I was very disappointed. It seems like that they want to acknowledge we have a problem, and do nothing about it. They're talking about more talk, more monitoring, but no action.

SCHALCH: He says instead of simply talking about filing trade cases against China, the U.S. should just do it. He says the U.S. must also force China to do something about its currency, which is undervalued and gives its exports an unfair advantage. Fred Bergsten who heads the Institute for International Economics agrees, but he says the USTR. does seem more prepared now to hold China's feet to the fire.

FRED BERGSTEN (Institute for International Economics): I think there are some threats, some veiled, not so veiled references to things the U.S. could do to make it hotter for the Chinese if they do not cooperate in the ways that are called for.

SCHALCH: Including threats that the U.S. will continue negotiating bilateral trade pacts with China's neighbors. Deals that leave China out. And Bergsten says the report suggests that the U.S. is ready to take its complaints to the World Trade Organization if their not addressed. Kathleen Schalch, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

Kathleen Schalch
Kathleen Schalch is a general assignment reporter on NPR's national desk. Her coverage can be heard on NPR's award-winning newsmagazines Morning Edition, All Things Considered, and Weekend Edition.