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CHINA / Weekly Roundup

US: Ready to use all options vs China on trade
(Reuters/chinadaily.com.cn)
Updated: 2006-03-17 08:13

The United States will do whatever it can, including filing a case with the World Trade Organization (WTO), to stop China discriminating against certain U.S. goods, Deputy U.S. Trade Representative Karan Bhatia said.

After a "top-to-bottom" review of its trade relations with China, the U.S. concluded it should treat China as a "mature trading partner," that must bear its responsibilities under a global rules-based trading system.


A Chinese worker walks past containers in Longwu Port in Shanghai, January 11, 2006. [Reuters]

"The United States is prepared to use all necessary tools to secure China's compliance with its WTO commitments," Bhatia, on a visit to the Philippines, told reporters on Thursday.

"Hopefully, we will be able to work through those problems without resorting to litigation.

"But the hallmark of a mature trading relationship, and I think increasingly we and China have a mature trading relationship, is that we can make use of WTO mechanisms if it is needed," he said.

Both the U.S. and the European Union contend that China was violating WTO rules by imposing high tariffs on foreign auto parts after exceeding a certain quantity.

Many members of the U.S. Congress have urged the Bush administration to take stronger action on trade with China, arguing that the Asian state deliberately undervalues its currency by 15 to 40 percent to give its exporters an advantage.

Bhatia's comments come ahead of a Senate vote later this month on a bill that would impose a 27.5 percent tariff on Chinese exports to the U.S. unless Beijing revalues its currency.

Chinese Premier Wen Jiabao ruled out any further one-off surprise ajustment of renminbi exchange rate Tuesday after the conclusion of the annual session of China's top legislature.

Wen promised that his government would allow the yuan to move more flexibly but saw no need for another one-off surprise adjustment such as last July's 2.1 percent revaluation against the dollar.

"According to the current market-oriented currency formation regime, there is room for the yuan to fluctuate either up or down on its own in line with changes in the market. It's no longer necessary for China to take one-off administrative measures," Wen told a news conference.

The yuan has risen by about 1 percent since it was revalued by 2.1 percent on July 21, 2005, depegged from the dollar and set free to float in a managed bands.







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