The United States has won a string of commitments from China aimed at narrowing a record trade gap, but U.S. industry groups said the real test could come next week in talks between Chinese President Hu Jintao and President Bush over China’s currency system.
In a leadup to those discussions on April 20, top economic officials from both countries struck a series of deals on Tuesday in which China pledged to lift its ban on American beef, to crack down on the sale of pirated computer software and to begin negotiations on allowing foreign firms to compete for Chinese government contracts.
American industry groups were generally pleased with the results of an annual meeting of the Joint Commission on Commerce and Trade, which was created in 1983 to resolve trade frictions between the two nations.
Frank Vargo, vice president for international trade at the National Association of Manufacturers, called the deals announced Tuesday “incremental contributions to the removal of trade obstacles.”
But he said he was hopeful that they will set the stage for a significant breakthrough during the Bush-Hu summit next week on the issue of currency.
American manufacturers contend that China is depressing the value of its currency by as much as 40 percent to make Chinese goods cheaper for U.S. consumers and American products more expensive in China.
While China has allowed the value of the yuan to rise by a little over 3 percent in the past year, U.S. companies contend the Chinese are going far too slowly in dealing with what could make a big difference in narrowing the trade gap.
Bush, citing America’s $202 billion deficit with China, said Monday he was hopeful that Hu would address the currency issue during his visit.
The talks on Tuesday were led by Commerce Secretary Carlos Gutierrez and U.S. Trade Representative Rob Portman, both of whom praised the Chinese for the commitments they did make.
“In our discussions today, which were very frank and positive, we were able to solve some problems,” Portman said at a joint closing news conference.
Chinese Vice Premier Wu Yi, who led the Chinese delegation, said her country has been “earnestly implementing” the directions of China’s top leaders to boost imports from the United States.
China agreed to move to lift the beef ban it imposed after the first case of mad cow disease was discovered in the United States in December 2003 but said it would do so only after certain technical issues were resolved.
U.S. Agriculture Secretary Mike Johanns predicted those details would soon be worked but he refused to give a timetable of when beef shipments could resume.
On copyright piracy, China agreed to require that all computers sold in the country be loaded with legal operating software and to increase enforcement efforts against all forms of copyright piracy.
The Chinese have made previous pledges to crack down on copyright piracy but piracy rates for computer software remain near 90 percent. Gutierrez said the U.S. government would be closely monitoring implementation of Tuesday’s agreements.
“As in everything else, the numbers will ultimately tell the story,” he told reporters.
Wu noted that she was traveling with a delegation of more than 200 Chinese business executives with the expectation that they will sign 107 contracts to buy $16.2 billion in U.S. products during stops in a number of states.
Those deals included the signing on Tuesday of a purchase agreement for 80 commercial jetliners from Boeing Co., at a list price of $4.6 billion. This agreement completes a commitment China made during Bush’s visit last November to purchase 150 Boeing planes.
China also made commitments to streamline the approval of American medical devices for sale in China, to adjust capital requirements that American telecommunications companies see as a major barrier to setting up Chinese operations and to make sure new rules do not discriminate against U.S. express delivery firms.
While many U.S. business groups praised the new commitments, not all were impressed.
Alan Tonelson, a research follow at the U.S. Business Industry Council, which represents many small manufacturing companies, said the Bush administration had settled for “photo ops and tokenism” rather than insisting on real changes in China’s unfair trade practices.