USTR - Making China Trade a Two-Way Street
                 
The Office of the United States Trade Representative

Making China Trade a Two-Way Street
04/21/2004


A Track Record of Results

• China entered the World Trade Organization (WTO) in 2001 – opening its large and growing market to American goods and services and committing to a series of sweeping economic reforms.

-- The United States did not reduce a single tariff or make any other market-opening concessions to China as a result of China’s WTO accession.

• Membership in the global rules-based trading system subjects China to the same rigorous standards of fairness, transparency and predictability that apply to the United States and more than 140 other economies around the world.

• The United States is committed to holding China to its WTO obligations and to making bilateral trade a two-way street.

• China has taken many steps to meet WTO requirements – repealing or revising more than 1,100 laws and regulations, reducing tariffs, removing market access barriers, and establishing new transparency procedures.

• But where implementation has slowed or performance has been incomplete, the United States has acted promptly to achieve results for American farmers, manufacturers and service providers – using informal consultations where possible and formal mechanisms where necessary.

Achieving Results

• U.S. officials have pressed China to remove remaining trade barriers and to implement its WTO commitments on schedule. As a result of these efforts, China is moving forward on a range of important issues.

• China has agreed to further open its market to U.S. agriculture exports.

-- Easing import rules for agricultural commodities, facilitating record-setting sales of U.S. cotton to China in 2003 (totaling nearly $740 million).

-- Issuing safety certificates for biotech soybeans, allowing for unprecedented U.S. soybean exports to China in 2003 (totaling nearly $2.9 billion).

-- Ending arbitrary limits on pork and poultry shipments.

-- Adopting U.S.-proposed changes to meat and poultry labeling.

• China has agreed to remove barriers to U.S. exports of manufactured goods, high-technology products and chemicals.

-- Opening the motor vehicle financing sector and easing auto import quotas, paving the way for increased sales of U.S.-designed and produced automobiles and parts.

-- Allowing more U.S. computers, telecommunications equipment and electronic components to enter its market at reduced or zero duties.

-- Removing preferential tariff treatment for exports from China’s neighbors of boric acid and approximately 20 other chemicals.

-- Ending the practice of over-valuing U.S. digital media products for customs purposes and allowing those goods to enter at reduced duties.

• China has agreed to changes that will further level the playing field for U.S. service providers:

-- Reducing high capitalization requirements for U.S. and other foreign insurance firms, and increasing the efficiency with which licensing decisions are made.

-- Stabilizing international telephone interconnection rates.

-- Removing burdensome weight and rate restrictions for express delivery companies, expanding the ability of U.S. firms to deliver packages into, out of and within China.

Enforcing WTO Obligations

• Where informal consultations have not achieved necessary outcomes, the United States has used formal WTO mechanisms.

• On March 18, 2004, the United States filed its first WTO case against China regarding its refund of value-added tax on integrated circuits produced in China, which discriminates against U.S. semiconductor exports. Dispute settlement consultations in this case will commence in Geneva the week of April 26.

• In other cases, the United States has raised concerns at meetings of the 16 WTO councils and committees and actively used the Transitional Review Mechanism – a special multilateral mechanism at the WTO – to review China’s implementation of its commitments.

• It has also used consultations pursuant to a special provision of China’s accession agreement to resolve key U.S. concerns on China’s administration of tariff-rate quotas for agricultural commodities and related products like cotton, wheat and fertilizers.

"To exercise the responsibility that comes with its new status as a trading power, China must fully implement the commitments it madeon joining the WTO," said Ambassador Robert B. Zoellick, February 25, 2004