USTR Cites Concerns over China’s Trade Policies

14 December 2011

U.S. Trade Representative Ron Kirk will lead the U.S. delegation to the World Trade Organization's eighth annual ministerial conference to discuss global trade.

Ten years after joining the World Trade Organization (WTO), China has made major progress in strengthening its international trade ties, but the office of U.S. Trade Representative (USTR) Ron Kirk says significant concerns about the country’s economic and trade policies remain.

“Following China’s accession to the WTO, Chinese leaders took many impressive steps to implement a set of sweeping commitments,” Kirk’s office said in a December 12 report. “Despite this progress, the overall picture currently presented by China’s WTO membership remains complex, given a troubling trend in China toward intensified state intervention in the Chinese economy.”

The report to Congress on China’s WTO compliance, compiled annually by the USTR and required by the U.S.-China Relations Act of 2000, commended the country for reducing tariffs, eliminating nontariff barriers to the trade of goods and services and making legal system improvements to protect intellectual property rights.

“These steps unquestionably deepened China’s integration into the international trading system,” the report said, adding that trade and investment during the past decade have “expanded dramatically between China and its many trading partners, including the United States.”

U.S. exports to China have risen from a 2001 total of $19 billion to at least $92 billion in 2010, making the country the United States’ largest goods export market outside of North America. The report added that China also provides a substantial market for U.S. services, with the cross-border supply of private commercial services totaling $21 billion in 2010.

However, the USTR said that China’s progress toward further market liberalization began to slow in 2006, when “some Chinese government policies and practices raised increasing concerns that China had not yet fully embraced the key WTO principles of market access, nondiscrimination and transparency.”

The report said that in 2011, “the prevalence of interventionist policies and practices, coupled with the large role of state-owned enterprises in China’s economy, continued to generate significant concerns.” It cited China’s indigenous innovation policies, problems with intellectual property rights enforcement, and discrimination against foreign enterprises as some of the country’s most significant issues.

The USTR said that during the past year, the United States has worked with China to address these concerns.

“Progress was made on some meaningful issues, but many issues remain outstanding, and the United States was frank in expressing its view that the two sides need to redouble their efforts going forward,” the report said.

Looking ahead, Kirk’s office said China will need to reduce market-access barriers, fully embrace the rule of law and uniformly follow the “fundamental principles” of nondiscrimination and transparency.

“Completing this work is critical to realizing the tremendous potential presented by China’s WTO membership, including the breadth and depth of trade and investment — and prosperity — possible in a thriving, balanced global trading system,” the USTR concluded.

Representatives from the United States and China are scheduled to join their counterparts from the 153-member World Trade Organization for talks on global trade during the group’s eighth annual ministerial conference in Geneva December 15–17.