U.S. lawmaker urges investment treaty pact with China

WASHINGTON (Reuters) - A top U.S. Republican lawmaker on Thursday called on the Obama administration to negotiate an investment treaty with China and to increase pressure on the world's second-largest economy to make trade and currency reforms.

"Plain and simple, we cannot allow China to continue its unacceptable trade practices," House of Representatives Ways and Means Committee Chairman Dave Camp said in a speech, referring to longstanding barriers to U.S. exports and the widespread piracy and counterfeiting of U.S. goods.

"The litany of China's trade-distorting policies is deeply troubling and cannot be allowed to stand," Camp said. "In addition, we should pursue a Bilateral Investment Treaty with China," he said.

Camp's call for the United States to begin talks with China on a Bilateral Investment Treaty, or BIT, comes one week before Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner travel to Beijing for high-level talks.

It also follows the Obama administration's announcement last Friday that it had finished three years of internal deliberations on a so-called "model BIT," which will be used as a template for future negotiations.

That has raised expectations China and the United States could announce at the May 3-4 Strategic and Economic Dialogue meeting that they are relaunching negotiations on an investment treaty. The administration of former President George W. Bush began talks with China on a BIT, but they were put on hold after Obama took office in 2009.

"Business people have been telling the administration that this is important and that they have been waiting too long and they need to get moving on it," said Bill Reinsch, president of the National Foreign Trade Council, whose members include Boeing, Caterpillar and Microsoft.

Andrea Mead, a spokeswoman for the U.S. Trade Representative's office, said the U.S.-China meeting provided "an opportunity to discuss next steps on our negotiations now that the United States has released its new model BIT."

The United States and other countries negotiate bilateral investment treaties to protect their companies against potentially unfair foreign government actions, as well as to open up new business opportunities.

There are some 3,000 BITS in force around the world, of which the United States is party to around 40.

Camp said he was relieved the administration's review was over and hoped it signaled an end to the "administration's self-imposed paralysis in negotiating such agreements."

Like many U.S. business groups, he also expressed concern the administration's decision to seek expanded protections for the environment and workers rights in future BITs could make it much harder to negotiate the investment pacts.

Camp said the White House also should continue to push China to move more quickly to a market-determined exchange rate, a long-term irritant in U.S.-China economic relations.

China has allowed its currency to rise in recent years. But many U.S. lawmakers believe it is still undervalued, giving the Chinese an unfair price advantage in international trade.

(Reporting By Doug Palmer; Editing by Vicki Allen, Eric Beech and Dan Grebler)