China, U.S. try to take sting out of trade disputes
(Adds details, background)
By Lucy Hornby
HANGZHOU, China, Oct 29 (Reuters) - China and the United States agreed to tackle a series of trade irritants and reiterated pledges against protectionism, but left the broader questions of the value of Chinese currency and U.S. debt untouched at high-level talks that ended on Thursday.
In a sign that the global financial crisis has fuelled a risk of more, not fewer, trade barriers, Chinese Commerce Minister Chen Deming confirmed that Beijing would conduct a preliminary dumping investigation of U.S. auto imports.
The probe was initially announced in response to the imposition last month by the United States of tariffs on Chinese tyres, the first time the U.S. invoked safeguard clause China agreed to when it joined the World Trade Organisation.
Speaking to reporters after the bilateral meetings, officials from both countries tried to keep the focus on areas of agreement, not contention.
Importantly for U.S. businesses, China agreed to treat products of U.S.-China joint ventures as local products in government procurement tenders, and would submit a revised offer to join the World Trade Organisation's government procurement agreement by 2010, U.S. Trade Representative Ron Kirk said.
China will remove its local content requirement in tenders for wind power equipment, Zhang Guobao, head of the National Energy Administration, said.
The United States, for its part, agreed that imposing curbs on imports from China was not the way to tackle the country's politically contentious trade surplus, Chinese Commerce Minister Chen Deming said.
"The two have agreed that the solution to the trade gap between the United States and China is not to restrict imports from China but to promote balance," Chen told reporters through an interpreter.
China will soon allow imports of U.S. pork, after a ban following the outbreak of the H1N1 flu virus, also known as swine flu, Chinese Agriculture Minister Sun Zhengcai and his U.S. counterpart, Tom Vilsack, said.
The U.S. Congress had earlier dropped its ban on U.S. agencies certifying Chinese cooked poultry for U.S. sales.
"I hope pork imports can quickly resume, but I also hope the the U.S. will follow Chinese requirements to credibly ensure the quality, safety and health of pork exports to China," Sun said, adding China had already restored cooked pork products imports.
They did not give a timeframe for the ban to be lifted.
OBAMA'S VISIT
President Barack Obama will travel to China in mid-November, preceded by a flurry of official American visits as the United States tries to reach accords on currency, the environment and trade with its second-largest trading partner and the largest foreign holder of its government debt.
For a FACTBOX on the two countries' interdependency, please click on [ID:nPEK294728].
Chen said the United States agreed to establish a working group to examine Beijing's long-standing demand that Washington formally regard it as a market economy, a status that would make it harder to impose trade penalties on China.
As part of its WTO agreement, China gets that status automatically in 2016, but is pushing for earlier recognition in light of its market reforms.
Chen said progress on U.S. recognition was unrelated to "micro-economic" issues such as U.S. concerns that China subsidises its state-owned enterprises with cheap loans, land and other resources.
The U.S. failed to get China to retreat on regulations over online music distribution, but officials said they were pleased with Chinese pledges to combat and punish Internet piracy.
Intellectual property rights are one of the biggest concerns of U.S. investors in China, where piracy of brand name clothing, films, books, music, and industrial patents is rampant.
The Obama administration angered China, whose economy is heavily dependent on exports, when it slapped a 35 percent safeguard duty on imports of Chinese-made tyres, which totaled about $1.8 billion last year.
China immediately challenged the action at the World Trade Organisation and said it would launch an anti-dumping and countervailing-duty investigation against U.S. poultry and autos to offset unfair pricing and government subsidies.
The probe into U.S. auto imports would be "objective, just and fair," Chen said. (Editing by Nick Macfie)
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