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To: JohnG who wrote (10303)	4/4/2001 11:21:14 AM
From: JohnG	Read Replies (1) \| Respond to of 34857

China is biggest U.S. trade headache WTO membership key to evening imbalance By Rex Nutting, CBS.MarketWatch.com Last Update: 2:13 PM ET Apr 3, 2001 WASHINGTON (CBS.MW) -- The diplomatic tiff with China over U.S. spying has overshadowed a deeper-seated problem between the world's largest economy and the world's most populous nation: trade. China has replaced Japan as America's biggest trade headache. In 2000, the trade gap with China was a record $83.8 billion -- nearly 19 percent of the overall U.S. trade gap for goods of $449.5 billion. Never, in other words, has any nation sold so much to another while buying so little in return. Business leaders urged Washington's political leaders to keep economics separate from military and political disputes. "This military accident should not be used politically to torpedo other ongoing relationships," said Myron Brilliant, managing director of the Asia department at the U.S. Chamber of Commerce. As tensions ratchet higher, U.S. businesses involved with China are counseling caution. They say things will get better assuming China eventually joins the World Trade Organization. "I'm more optimistic than I was a month ago" about WTO accession for China, Brilliant said. Recent negotiations over some unresolved disputes have been positive, he said, noting accession could come by the fall. After a major battle last fall, Congress approved a trade bill that would gradually lower China's tariffs on U.S.-made goods. The United States already gives Chinese imports preferential treatment on tariffs. See full story. In 2000, China sold $100 billion worth of goods to businesses and consumers in the United States, ranking fourth among all importers behind Canada, Japan and Mexico. See U.S. trade data. About half of that total -- $49.5 billion -- was in miscellaneous manufactured goods, such as footwear and toys. Another $34.9 billion was in machinery and transportation equipment. The Chinese sold $10.3 billion in textiles, clothing and other goods categorized by material. By contrast, U.S. producers sold just $16.3 billion worth of goods to the Chinese, ranking 11th behind such countries as the Netherlands and Singapore. About half of the China-bound exports, or $8 billion, was machinery and transportation goods, including aircraft, electronics and industrial equipment. Other big export items included crude materials, chemicals and other manufactured goods. The U.S. hopes to boost trade in services with China via high-profile agreements negotiated by, among others, United Parcel Service (UPS: news, msgs, alerts) and insurance giant American International Group (AIG: news, msgs, alerts) . Rex Nutting is Washington bureau chief of CBS.MarketWatch.com