Democrats warn Bush on China investment talks

WASHINGTON (Reuters) - Two senior Democratic lawmakers on Wednesday criticized the Bush administration's decision to launch bilateral investment talks with China and said any major decisions about the pact should be left to the next president.

"We have serious concerns about the administration's negotiating objectives, the timing of these negotiations, and how these negotiations fit within an overall strategy for an international economic policy with China," House Ways and Means Committee Chairman Charles Rangel and House Trade Subcommittee Chairman Sander Levin said.

"If the administration moves forward with these negotiations, it should make clear to China that all major decisions in the negotiations will necessarily be left to the next president," the lawmakers said in a letter to U.S. Secretary of State Condoleezza Rice, Treasury Secretary Henry Paulson and U.S. Trade Representative Susan Schwab.

Paulson and Chinese Vice Premier Wang Qishan announced the decision to begin bilateral investment negotiations at the end of a semiannual "strategic economic dialogue" meeting on Wednesday between the two countries.

"Our two governments will begin these negotiations soon, and expect to have several rounds of discussions before the next SED meeting. We will work for a high-standard BIT (bilateral investment treaty), which is clearly in the mutual economic interests of both our nations," Paulson said.

The decision to launch the negotiations followed 17 months of exploratory talks. A treaty would create a forum to resolve investment disputes between the two countries and -- depending on the pact's final scope -- could tear down many investment barriers U.S. companies now face in China's market.

The proposed treaty would require two-thirds majority vote in the U.S. Senate, a potentially difficult task.

At an earlier briefing for reporters, Bush administration officials said they expected a "very challenging" negotiation with China that could take more than a year, or well past the time President George W. Bush leaves office in January.

However, Rangel and Levin said they were concerned the White House would rush to get an agreement and sacrifice key U.S. investment treaty principles in the process.

They also accused the Bush administration of not having a "coherent and effective strategy" for dealing with China trade. While Bush has been in office, the annual U.S. trade deficit has hit a record $256.2 billion and Chinese piracy and counterfeiting of U.S. goods has increased, they said.

Also, "the administration has failed to stop China from manipulating its currency, despite more than five years of dialogue at the highest levels," the lawmakers said.

(Reporting by Doug Palmer, Editing by Neil Stempleman)