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Trade war: US vs the rest of the
world
BEIJING - China and
the United States have brought out separate
reports blaming each other for raising maximum
trade barriers, once again bringing their
increasing differences over trade-related issues
into sharp focus.
Apart from China,
at which its ire is primarily targeted, the US
report names dozens of other countries for
blocking trade, even as the European Union and Canada
have joined hands to slap an extra 15% tariff on
a range of US goods in retaliation to the Bush
administration's use of anti-dumping duties.
Meanwhile, the 182-page annual foreign
market access report released by China's Ministry
of Commerce on Thursday claimed that Chinese
companies faced more trade and investment barriers
in the US than in any other part of the world in
the past year. While it devoted 22 pages to the
obstacles faced in the US, the European Union
received 18 and Japan 14. It is the third report
of its kind to be issued by the ministry's Bureau
of Fair Trade for Imports and Exports, summing up
Chinese firms' trade and investment difficulties
in the nation's 22 major trading partners.
Trade remedies, technical standards,
quarantine, quality inspection, intellectual
property rights, customs procedural requirements,
environmental protection and labor standards were
among the measures used against Chinese exports
and investment, according to the report. While the
first edition of the report highlighted 250 trade
and investment problems, this edition pointed to
450.
A total of 16 economies initiated 57
anti-dumping and safeguard investigations against
Chinese goods last year. These cases involved
goods worth US$1.26 billion, the highest in the
world. The report alleges that US legislation
contains several discriminatory provisions against
Chinese products. The US filed six anti-dumping
investigations and 12 product-specific
investigations involving Chinese exports last
year.
The 672-page report released by the
office of the US Trade Representative (USTR), on
the other hand, reported a "significant increase
in bilateral trade friction" and listed the
"epidemic" of Chinese fake goods as one of the
superpower's most serious headaches. "Epidemic
levels of counterfeiting and piracy in China cause
serious economic harm to US businesses in
virtually every sector of the economy," said the
report, which dwelt mostly on China - 58 pages.
Detailing the areas where the Chinese have
allegedly not lived up to the market-opening
promises they made to enter the World Trade
Organization (WTO), China, the US report said, was
failing to enforce its laws against the rampant
theft of American movies, software and other
intellectual property.
The "National Trade
Estimate Report on Foreign Trade Barriers", which
has been prepared annually for 20 years, said the
US would pull down these obstacles to its exports.
"Eliminating trade barriers so that American
workers, farmers and businesses can have increased
access overseas for our goods and services is one
of USTR's core missions. Consultations,
negotiations and litigation are among the tools at
our disposal, and we are using them aggressively
to make sure that Americans are treated fairly,"
said acting Trade Representative Peter Allgeier.
The countries and trading areas named in the US
barriers report are: Angola, the Arab League, Argentina,
Australia, Bahrain, Bolivia, Brazil, Bulgaria,
Cameroon, Canada, Chile, China, Colombia, Costa
Rica, Ivory Coast, the Dominican Republic, Ecuador,
Egypt, El Salvador, the European Union,
Ghana, Guatemala, Honduras, Hong Kong, India,
Indonesia, Israel, Japan, Kazakhstan, Kenya,
South Korea, Kuwait, Malaysia, Mexico, Morocco,
New Zealand, Nicaragua, Nigeria, Norway, Oman,
Pakistan, Panama, Paraguay, Peru, the
Philippines, Qatar, Romania, Russia, Saudi Arabia,
Singapore, the Southern African Customs Union, Sri
Lanka, Switzerland, Taiwan, Thailand, Turkey,
Ukraine, the United Arab Emirates, Uzbekistan,
Venezuela and Vietnam.
The US,
which registered a record trade deficit of $617
billion last year, ran up a deficit of $162 billion
with China, the largest deficit ever with any
country. US manufacturers complain that China's most
subversive trade practice is its "undervalued"
currency that lends Chinese companies a tremendous
competitive advantage and promotes exports at the
cost of other economies. But the barriers report
made no mention of the yuan; trade officials
maintained that currency matters were handled by
the Treasury Department, not the trade office.
In February itself, Chinese mills doubled textile and
apparel shipments to the US. Nearly $1 billion of
jeans, sheets, fabric and other textile goods found
their way to American shores from China, compared
with $424 million a year ago, according to
Global Trade Information Services Inc, a
Columbia, South Carolina, firm that compiles data from
Chinese customs officials. The 125% increase in
February follows a 75% rise in January. The
February figure is significant as it came about
despite plant shutdowns for the big Chinese New
Year holiday.
The surge in Chinese exports
is mounting domestic pressure on the Bush
administration to respond. Soon after the release
of the USTR report, House Democrats urged
President George W Bush to act against China,
along with other countries accused of unfair trade
practices. They said the office of the USTR in the
four years since Bush took office has brought just
a dozen cases to the WTO, compared with more than
10 a year during Bill Clinton's presidency.
Apart from China, the US report slams
India and Japan for "excessively protecting" their
telecom markets. "We are deeply concerned by the
tepid commitment some of our trade partners have
shown to competition in the telecommunications
sector," said Allgeier. "This is especially true
in countries such as China, India and Japan, where
national operators are already competing on a
global level, but remain protected at home by
relatively closed markets ... USTR expects more
vigorous oversight by the Indian regulatory body
and the government."
Trans-Atlantic
war
The US trade barriers report also
lambasts the US's biggest trading partner, the EU,
for "obstacles" put up by it. America's pet peeve
is the state subsidy allegedly extended to
European aircraft maker Airbus that has supposedly
helped it to overtake US giant Boeing. EU
restrictions on US beef, poultry and genetically
modified food have also come under attack, so have
non-trade barriers such as different safety and
customs standards in different EU member states.
But far from being cowed by the scathing
criticism, the EU - along with Canada - has
announced that they will impose trade sanctions on
several American goods in retaliation to a tax
system that compensates American manufacturers
"hurt" by foreign goods sold "below cost". From
May 1, the EU and Canada will raise import duties
by 15% on US products ranging from pocket diaries,
women's trousers, frozen sweet corn, cigarettes,
pigs and oysters.
The retaliation comes in
response to the Byrd amendment that allows the US
government to pass on the proceeds from import
duties to the companies that request these duties
as anti-dumping protection. In four such
distributions since 2000, the US government has
handed $1 billion to American companies. In
November, the WTO ruled that the Byrd amendment
was unfair and listed seven countries, including
Canada, China and Japan, which could impose
sanctions in retaliation. This row comes close on
the heels of the collapse of negotiations between
Europe and the US over subsidies to Airbus and
Boeing.
(Asia
Pulse/XIC) |
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