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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (1249)	11/6/2003 7:00:45 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

An unwise, and unfair, assault on China's markets Kevin Watkins IHT Friday, November 7, 2003 Washington-Beijing OXFORD, England In the 19th century, Britain used gunboats to impose unequal trade treaties on Chinese emperors. Today, the United States is trying its hand at the same game using more subtle weapons, including the rules of the World Trade Organization. When China joined two years ago, it brought a fifth of the world's population into the WTO's multilateral trade system. The hope was that membership in a rules-based organization would give China new opportunities for economic growth. Since then China has had a baptism by fire. . At this autumn's Cancún meeting of trade officials, China forged a powerful alliance with India, Brazil and South Africa, blocking European and American efforts to impose deals on agriculture and market access and shifting the WTO balance of power. And it appears the Bush administration has launched a no-holds-barred bilateral trade assault on China, aided and abetted by the WTO treaty. . Over the past two weeks, the U.S. trade representative, Robert Zoellick, and Commerce Secretary Donald Evans have been rattling sabers in Beijing. Their message: China is dragging its feet on WTO market opening commitments and American patience is running out. “Your trade practices are exploiting our open markets and creating and unfair advantage that is undercutting American workers,?Evans told the Chinese. Meanwhile, the U.S. Treasury is pressuring China to let its currency appreciate in value. . Whole armies of lobbyists and special interest groups are working themselves - and the American public - into a China-bashing frenzy. The National Association of Manufacturers is demanding punitive tariffs. The American Farm Bureau is demanding measures to pry open Chinese agricultural markets. Congressmen are backing protectionist legislation. . The putative justification for the assault is the United States' $100 billion trade deficit with China. But America's trade deficit is the product of good old-fashioned economic mismanagement, the natural counterpart to the huge U.S. budget deficit generated by tax cuts. In fact, China's overall trade surplus is small in relation to gross domestic product. And China is one of the few markets in which U.S. exports have been increasing. . Claims that China has stopped moving toward open-door trade are plainly unsubstantiated. Since 1992, average tariffs have been cut from 40 percent to 10 percent. They will be halved again over the next five years under the WTO accession agreement. And what does China get in return? More discrimination. . At the heart of the discrimination is China's status in the WTO as a "nonmarket economy." Under WTO rules, governments are allowed to impose anti-dumping duties on imports that harm domestic industries, provided they prove they are sold at artificially low prices. The burden of proof is virtually eliminated in cases involving nonmarket economies. . China is the victim of unparalleled violations of the principle of nondiscrimination upon which the entire WTO system is built. They threaten literally millions of jobs in China's manufacturing sector. . The story in agriculture is even more shocking. Having received a large increase in farm subsidies in 2002, U.S. farmers demand that China open up national agricultural markets. According to U.N. figures, government support to U.S. agriculture amounts to around $50 billion a year. China is being asked to expose its farmers to competition from subsidized U.S. agricultural surpluses sold at a fraction of their cost of production. Rapid liberalization would compound rural poverty and exacerbate China's already extreme rural-urban inequalities. . Over the past two decades, China has lifted more people out of poverty more quickly than any country in recorded history. Trade has played a vital role. The danger now is that unfair trade rules will stall China's progress. . So where should China go from here? Not off on its own. China has a common interest with other developing nations in demanding WTO rules that restrict the scope for arbitrary and discriminatory protectionism and prohibit export dumping. . The alternative is to abandon multilateralism in favor of trying to secure a good bilateral deal with the Bush administration. In a U.S. election year, that is not a good idea. . The writer is head of research at Oxfam.