USTR Pledges Tough China Trade

China’s continued intransigence over free trade issues, including
intellectual property rights, dictates a “readjustment” in American policy,
U.S. Trade Representative (USTR) Rob Portman said today.

In a USTR report released to Congress, Portman said that the 25-year-old
U.S. policy of economic engagement with Beijing is in danger
in the absence of “tangible evidence” of Chinese reform.

“As a mature trading partner, China should be held accountable for its
actions and required to live up to its responsibilities, including opening
markets and enforcing intellectual property rights,” Portman said at a
Washington press conference. “We will use all options available to meet this

In particular, the report states, China’s focus on export growth and
developing domestic industries is not being matched by a comparable focus on
fulfilling market-opening commitments and on the protection of intellectual
property and internationally recognized labor rights.

“Despite three consecutive years of growing U.S. exports to China, our
bilateral trade relationship with China today lacks equity, durability and
balance in the opportunities it provides,” said Portman. “The time has come
to readjust our trade policy with respect to China.”

The USTR report reviews the status of U.S.-China trade relations following
Beijing’s first four years of membership in the World Trade Organization

“I believe we require a more vigorous enforcement effort with respect to
China and the dedication of resources to make such an effort effective,”
Portman wrote in a cover letter to the report.

In what Portman called an “unprecedented move” against a single country, the
USTR plans to create a China Enforcement Task Force headed by a new chief

“I believe this kind of dedicated, country-specific enforcement team is
needed to improve China’s compliance with its obligations,” Portman wrote.

The new recommended policy also calls for increased coordination with other
trading partners to pressure China on intellectual property rights.

According to the Business Software Alliance (BSA), software piracy in the
Asia-Pacific region cost manufacturers close to $8 billion in 2004.
Worldwide losses due to software piracy were estimated at more than $32
million. The BSA puts piracy rates in China at 90 percent.

Last May, the USTR placed China on the U.S.’s Priority Watch List for intellectual property abuses, a step that could lead to trade sanctions.

“The most common and sometimes most frustrating response I hear from the
Chinese is that the government is working on the problem but it will take
lots of time,” Portman said on a November visit to

“We have heard it with currency and we also hear this very often
in regard to the protection of intellectual property rights.”

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