Officials, analysts hail US trade move
By Dai Yan and Hu Qihua (China Daily)
Updated: 2004-04-30 08:32

Chinese officials and analysts yesterday hailed the Bush administration's decision to deal with Sino-US trade issues through better communication and engagement rather than by further sharpening conflicts.

The US Government on Wednesday rejected a request by US trade union confederation AFL-CIO for an investigation into alleged "violations" of workers' rights in China and currency manipulation.

The administration argued that diplomatic engagement was a far better means of tackling the record US trade deficit with China.

Both the Ministry of Commerce and the Foreign Ministry yesterday welcomed the US move.

"We welcome and appreciate the decision of the US Government," Foreign Ministry spokesman Kong Quan told yesterday's regular press conference.

"Solving these questions through dialogue and consultation to narrow the differences between the two countries will be very helpful to both sides in strengthening mutually beneficial economic and trade co-operation," Kong said.

Li Yushi, vice-president of the Chinese Academy of International Trade and Commerce, a think-tank of the Ministry of Commerce, said the move was a hard but wise one by President George W. Bush, who is seeking re-election later this year.

The senior international trade expert said many had expected Bush to submit to pressure and agree to the investigation.

Earlier this month 37 US business organizations, representing companies such as General Electric, Boeing and Exxon Mobil, wrote to Bush urging him to reject the AFL-CIO's request.

In comments made before the decision, US Chamber of Commerce President Thomas Donohue had warned that accepting the AFL-CIO's complaint would inextricably link workers' rights with trade, something which he would consider a "fundamental error."

US business groups praised the government's decision, saying it had shown political courage.

"Accepting these petitions would take us down the path of economic isolationism," said US Trade Representative Robert Zoellick. "That is a path we will not take."

Li said last week's successful China-US Joint Commission on Commerce and Trade was partly responsible for the decision.

It made both sides realize that improved communication is better than making threats, leading to more concrete and positive results.

The Chinese side presented the United States with an action plan detailing steps it intended to take to crack down on what US industry alleges is the rampant piracy and counterfeiting of its products.

The plan included stiffer criminal penalties and pledged nationwide enforcement. China also pledged to accelerate the opening of the distribution system by allowing US companies to distribute their own products to Chinese stores without having to use a State-owned intermediary.

For its part, the US administration agreed to reconsider the export ban on some US high-tech products to China.

The United States also agreed to discuss China's market economy status, which was recently recognized by the New Zealand Government.

Both China and the US have benefited from this improved communication, Li said.

The United States has recognized the key to solving the trade deficit is to expand US exports to China rather than restricting Chinese exports to the United States, Li said.

The United States' global exports grew by only 9 per cent over the past three years, but its exports to China increased by a massive 76 per cent during the same period.

"Trade protectionism can never inject vitality into an economy or provide the fundamental solution to the unemployment problem," Li said.

The AFL-CIO asked for duties of as much as 77 per cent on imports from China, which would hurt both consumers in the United States and workers in China.

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