China targeted for unfair trade

Last year's $202 billion trade deficit with China is a record high.
WASHINGTON (AP) -- The Bush administration declared Tuesday that the United States has entered a new phase in its economic relationship with China and promised "rigorous enforcement" of laws aimed at curbing unfair-trade practices.
The pledge was contained in a 29-page administration review of America's economic relationship with China that was released four days after the government reported that the United States recorded a $202 billion trade deficit with China last year. That's the highest recorded with a single country and up 25 percent from 2004.
That deficit has brought renewed pressure from Congress for President Bush to be more forceful in cracking down on what China's critics see as blatant unfair-trade practices in currency manipulation, theft of intellectual property and China's refusal to honor all the market-opening commitments it made when it became a World Trade Organization member in 2001.
U.S. Trade Representative Rob Portman, whose office prepared the new review, said the administration intended to use "all options available" to address various problems with China.
"Our U.S.-China trade relationship lacks equity, durability and balance," Portman said at a news conference. "As a mature trading partner, China should be held accountable for its actions and required to live up to its responsibilities."
New position
Portman announced creation of a trade enforcement task force in his office that will be headed by a chief counsel for China trade, a new position.
He called it unprecedented for the USTR to devote an enforcement team to a single country. He said previous administrations had not done this when the United States was running huge trade deficits in the 1980s and 1990s with Japan.
Portman said the administration intended to focus on getting China to stop thefts of intellectual property, which American industry contends is costing billions of dollars in lost sales annually.
It also will focus on persuading China to honor the market-opening commitments it made in joining the WTO and halting various government subsidies to Chinese companies.
Chu Mao-ming, a spokesman for the Chinese embassy in Washington, said he could not comment directly on the new report because he had not yet seen it. But he said China did not want to "politicize trade issues. We hope that trade relations between China and the United States will be conducted under the principals of development, equality and mutual benefit."
Democratic critics of the administration's trade policies faulted the report for failing to announce trade cases that would be brought immediately against China before the WTO.
'Where's the beef?'
"After reading the report, I have to ask -- where's the beef?" said Rep. Benjamin Cardin of Maryland, the top Democrat on the Ways and Means trade subcommittee. "The administration promises no new enforcement of trade laws, no new action in the WTO and no further steps to combat China's unfair-trade practices."
Sen. Charles Schumer, D-N.Y., said the report contained a major omission by not discussing China's practice of depressing its currency's value against the dollar to gain trade advantages.
"It is amazing that in a comprehensive 29-page report, the trade representative fails to mention the 800-pound gorilla in the room -- how China manipulates its currency," said Schumer, who is sponsoring legislation to impose 27.5 percent penalty tariffs on Chinese products unless the country changes its currency policies.
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