WASHINGTON — The pace of the economic and government reforms promised by China when it joined the World Trade Organization is showing signs of slowing even though more work needs to be done, according to a new federal study.
The findings, contained in the “2006 Report to Congress on China’s WTO Compliance,” were submitted Monday by U.S. Trade Rep. Susan Schwab’s office on the fifth anniversary of China’s accession to the global trading body.
China’s progress toward compliance with WTO standards has been “decidedly mixed,” Schwab said in a statement. During the past five years, China has repealed, revised or enacted more than 1,000 laws and policies to bring itself into the economic mainstream, but critics argue that it continues to support its producers in violation of WTO rules.
“Chinese reforms have lowered systemic trade barriers to many goods and services from the United States and other WTO members and have begun to strengthen the rule of law in economic matters,” Schwab said. “At the same time, certain industries face frustrating barriers to doing business in China, and there are worrisome signs that China’s market liberalization efforts have slowed in the last year.”
Areas of particular concern include the protection of intellectual property rights, industrial policies, such as state subsidies, and the access U.S. firms have to the Chinese market.
China, like the U.S., has had to contend with protectionist sentiment from some domestic constituencies, said Erin Ennis, vice president of the U.S.-China Business Council, who noted improvements in China as well as room for more change.
China’s accession agreement “laid out exactly which parts of the economy had to be opened when and under what terms,” Ennis said. “Now that we’ve come to the end of that…you have to be hopeful that the Chinese central government continues to recognize the values of continued market opening.”
The U.S. and China have discussed the reforms in different forums, including the U.S.-China Joint Commission on Commerce & Trade, but the report said the federal government would pursue other avenues, such as bringing cases to the WTO, if discussions don’t yield results.
Domestic textile producers have long maintained that their businesses are being hurt by Chinese imports that are unfairly subsidized, for instance, through nonperforming loans from state-run banks.
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“China’s going to act at its own pace and if there are situations where U.S. industries are being injured, such as textiles, it would behoove the U.S. government to act proactively to limit that damage,” said a spokesman for the American Manufacturing Trade Action Coalition. “It should use all the trade tools at its disposal, and that’s everything from tax policy to dumping and countervailing duty laws to WTO actions.”
The report does not address at length China’s currency policies, which some economists and U.S. lawmakers contend depresses the value of the yuan by about 30 percent, giving the country’s exports a competitive advantage. Treasury Secretary Henry Paulson and other top Bush administration officials will be in Beijing this week for the inaugural meeting of the U.S.-China Strategic Economic Dialogue, which will cover a range of issues between the two countries, including currency.