High-level talks to solve biz disputes
By Dai Yan (China Daily)
Updated: 2004-04-06 08:36

The US-China Joint Commission on Commerce and Trade (JCCT) is expected to find solutions to increasingly thorny trade issues between the world's two big traders, analysts said.

Chinese Vice-Premier Wu Yi is scheduled to meet US trade representative Robert Zoellick and US Secretary of Commerce Donald Evans on April 21 in Washington.

This is the first meeting of the JCCT after its dialogue level was upgraded at the suggestion of Chinese Premier Wen Jiabao during his US visit last December.

The JCCT was established in 1983 as a forum for high-level dialogue on bilateral trade issues and a vehicle for promoting commercial relations.

It used to be co-chaired by the US Secretary of Commerce and China's Minister of Commerce.

Many sensitive trade issues are waiting to be discussed at the JCCT meeting, said Zhang Xiaoji, an expert from the State Council's Development and Research Centre.

Industries in both countries are keeping a close eye on how trade officials from the two countries resolve the spat on China's tax policy relating to the chip industry, which has been submitted to the World Trade Organization, Zhang said.

The United States filed its complaint to the World Trade Organization in March, the first against China since it joined the WTO in late 2001.

US safeguard measures on China's three textile products have also generated heated debate, Zhang said.

During the talks, the United States will likely focus on reducing the trade deficit, China's fulfillment of WTO promises, and will press for wider market opening.

In addition to chips and textiles disputes, trade friction over ongoing US anti-dumping cases on Chinese colour TV sets and bedroom furniture has increased.

"The JCCT will be an important platform for both sides to communicate and find a balanced solution," Zhang said.

Both sides also prefer to solve problems through negotiation rather than intensifying them through tariffs or blocks, he said.

"They have high expectations for the JCCT meeting," he said.

Despite the spat, both sides are convinced booming trade and economic co-operation between them serves the fundamental interests of the Chinese and American people, Zhang said.

Trade between China and the United States reached a historic high of US$126.3 billion in 2003 despite disputes over issues such as anti-dumping and trade imbalance.

However, an unnamed expert from the Chinese Academy of International Trade and Economic Co-operation said the nations won't budge on some key issues which will cloud the JCCT meeting.

In recent days, the Bush administration has shown it will pursue an aggressive trade agenda during this election year, as free trade and the migration of US jobs overseas, especially to China and India, have become hot-button issues.

President George W. Bush has been on the defensive because of the loss of some 2.6 million manufacturing jobs since he took office.

On March 16, the AFL-CIO, a large US trade union, accused Beijing of tolerating abusive employment conditions - including a ban on independent trade unions - that gives China an unfair trade advantage. The union's solution to place punitive tariffs of up to 77 per cent on Chinese imports is gaining support.

"In times of elections, US political cliques often exert special pressure on Sino-US trade. In particular, some low-competition industries would seek government protection under political banners," said the expert, who believes this would have a negative impact on the trade talks.

During the talks, China will stand firm on US abuse of the special safeguard, he added.

In its WTO agreements, China made a concession that allows WTO members to use special safeguard measures in cases where imports of Chinese origin cause or threaten to cause market disruption for domestic producers.

But the US launched the measure against Chinese textiles without enough proof of market disruption, the expert said.

The United States also frequently imposes anti-dumping duties on Chinese imports through flawed data to protect its domestic industry, he claimed.