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To: TobagoJack who wrote (2359)	11/20/2003 3:31:48 PM
From: russwinter	Read Replies (2) \| Respond to of 110194

Reuters U.S. Warns China on Subsidized Exports Thursday November 20, 1:59 pm ET By Doug Palmer and Scott Hillis MIAMI/BEIJING (Reuters) - The United States and China on Thursday intensified a textile trade dispute with China threatening higher tariffs on U.S. goods and Washington warning it would not tolerate Chinese imports from companies unfairly subsidized by Beijing. The volley of threats prompted warnings against resorting to protectionism from the venerable head of the U.S. Federal Reserve and a top IMF official. "We're not going to sit around and tolerate 50 percent of your enterprises being state-owned, which means they're state subsidized," U.S. Commerce Secretary Don Evans said on the sidelines of a meeting of Western Hemisphere trade ministers in Miami. China's Vice Commerce Minister Ma Xiuhong earlier told the official Xinhua news agency that Beijing will raise tariffs on some American imports. She did not elaborate. Two days ago the Bush administration decided to impose new import quotas on selected Chinese textile goods, which have been swamping U.S. firms. Evans emphasized the U.S. commitment to free trade but warned that countries enjoying liberal access to the American market must do so on a "level playing field." China's trade surplus with the United States, which is expected to hit a record $120 billion this year, has been at the root of bilateral trade tensions. The new American import quotas, which will not take effect until early next year, would limit the growth in shipments of bras, knit fabrics and robes, which account for only 4.7 percent of China's textile exports. But U.S. textile companies are pushing for much broader protections. CLOUDS OF PROTECTIONISM The dispute prompted words of concern from high-level officials, including Federal Reserve Chairman Alan Greenspan, who warned in Washington against "clouds of emerging protectionism." "Creeping protectionism," Greenspan said in a speech, must be "thwarted and reversed." An International Monetary Fund official, First Deputy Managing Director Anne Krueger, also said free trade was crucial for economic growth and that governments should not give in to lobbyists from special interest groups. "We cannot afford -- especially at this juncture -- any risk of a return to protectionism," Krueger said in New York. Shortly after the administration announced the temporary textile import quotas, Chinese wheat and soybean officials canceled buying trips to the United States. Farm commodity prices swooned in reaction. But by Thursday, wheat and soybean futures were trading higher in Chicago and some wheat industry officials were still optimistic that China, where grain reserves are falling, could be a major importer early next year. The U.S. Department of Agriculture said that during the week ending Nov. 13, sales of 527,400 tons of U.S. wheat to unknown destinations were registered. There was market speculation China may have quietly purchased that wheat before the textile trade fight began. China tried to put some distance between the U.S. move on textiles and its stated intention to raise tariffs on American goods. Ma said the new tariffs were in response to U.S. duties on steel imports enacted a year and a half ago -- duties that the World Trade Organization has recently ruled illegal. But Beijing did summon the U.S. ambassador to China late on Wednesday, telling him it was "shocked and dissatisfied" over the textile quotas, Xinhua said. Harsher words followed as the official China Daily accused the United States of cheap point-scoring, and said the imports caps would not fix the huge trade imbalance. "The cheap political points the Bush administration scored by touting trade protectionism will prove costly for U.S. consumers as well as global trade," the newspaper said. Evans indicated the United States had its eye on a China trade problem much larger than textiles. U.S. trade officials repeatedly have warned that China's copyright and patent protections are in need of significant reform. "We're not going to tolerate 90 percent of our intellectual property being stolen," Evans said.