U.S. assures China it won't 'shut down' imports

Mark Bendeich

KUALA LUMPUR (Reuters) - A senior U.S. trade official assured Beijing on Thursday that Washington would not use global concerns over Chinese product safety to crack down on imports from China and rein in its huge trade surplus.

Washington convened a special panel last month to review import rules and make recommendations on how to improve U.S. screening, leading to concerns that protectionist forces within Congress could use the issue to curb Chinese imports.

"We are not looking to shut down our market to protect domestic manufacturers," Deputy U.S. Trade Representative Karan Bhatia told Reuters in an interview during a visit to Malaysia.

"We are looking to ensure that the products are safe."

The panel, headed by Health and Human Services Secretary Michael Leavitt, was convened after a string of product-safety scandals, ranging from toys to toothpaste. The world's largest toy-maker Mattel Inc. (MAT.N) recently made two recalls of millions of Chinese-made toys because they could injure children.

This month, after the second Mattel recall, Chinese state media lashed out, saying it revealed a protectionist agenda and pinned the blame on foreign manufacturers operating in China.

But Bhatia promised on Thursday that Washington would not use the issue to press Beijing to rein in its surplus which, at $144 billion last year, has rankled many lawmakers in Congress.

"That's not what we have been doing and that's not what we are going to do," Bhatia said.

"This is not a trade deficit issue and this is not something that provides leverage in trade negotiations. We have been very clear to China that that is not our intention at all."

He said legitimate concerns over product safety needed to be addressed but agreed there was a risk that U.S. protectionists could exploit the recent scandals.

"We hope that those who do seek to act for protectionist purposes don't take advantage of these issues," said Bhatia, who is stepping down from his post next month. "I think that would be unfortunate."

The U.S. panel reviewing import rules is due to report to President George W. Bush on September 17 then present more detailed proposals in mid-November.

There are expectations that stretched inspection teams could be beefed up or that safety duties, now shared across several agencies, could be streamlined. Washington is also talking to Beijing about more stringent oversight at the export end.

Bhatia stressed that product-safety concerns went beyond China but would not say which other countries or regions also presented concerns, adding that the issue was a consequence of the move by mainly Western firms to shift production offshore.

"I think at the end of the day that real protectionism will not be successful, but it's something we have to be vigilant against."