UPDATE 3-USTR takes aim at China in trade barrier reports

 * China in trade spotlight over myriad trade barriers
 * China currency policy not explicitly mentioned in report
 * Highlights China export constraints, procurement policy
 * USTR tallies concerns on more than 60 trade partners
 (Adds quotes from analysts, Representative Levin)
 By Paul Eckert and Roberta Rampton
 WASHINGTON, March 31 (Reuters) - China retains a raft of
non-tariff barriers, including tax rebates and quotas, that
discriminate against foreign manufactured and farm goods, the
U.S. Trade Representative's office said on Wednesday in its
annual report to the U.S. Congress.
 The report, along with two new spotlights on technical
barriers to manufactured goods and farm exports, comes at a
time of rising economic tensions with China over Beijing's
exchange rate policy and an import substitution campaign.
 But the trio of reports, which comprise about 600 pages of
trade irritants with more than 60 countries, did not include
any mention of China's currency policy.
 President Barack Obama faces intense political pressure to
label China, in a semi-annual report slated for April 15, as a
currency manipulator for keeping the yuan artificially weak,
making it hard for U.S. firms to compete.
 Not mentioning the currency policy in the USTR report could
upset congressional Democrats who want the Obama administration
to pressure Beijing on the issue, said Scott Lincicome, a trade
lawyer with White & Case in Washington.
 "It gives me hope that the whole currency issue is not
going to devolve into some sort of tit-for-tat trade war,"
Lincicome said.
  China has denied it is manipulating its currency and
warned it will retaliate if its goods are hit with duties.
ANALYSIS: Currency push on China no slam-dunk  [ID:nN30103249]
USTR technical barriers report:
USTR farm barriers report:
National Trade Estimate report
FACTBOX-China, US spar over value of the yuan  [ID:nTOE61301O]
FACTBOX-US "most wanted" list on farm offenders[ID:nN31231596]
 The USTR report covered longstanding concerns by U.S.
businesses about counterfeiting, export subsidies and taxation
policies that tilt the playing field to favor Chinese firms.
 It lays out the U.S. case at the World Trade Organization
against China's export constraints on materials used to make
steel, aluminum and chemicals, noted trade lawyer Lincicome.
 The report described the hot-button issues of Internet
censorship and technology policies that discriminate against
foreign firms operating in China -- but removed specific
references to Google Corp GOOG.O that had been part of the
previous year's report.
 Google moved its Chinese search portal to Hong Kong from
China this month in a censorship dispute.
 "Chinese government authorities may issue lists of banned
search terms or banned sites weekly, with little justification
or means of appeal, putting Internet-enabled services in a
precarious position," the USTR report said.
 Echoing increasing criticism from U.S. and other foreign
businesses in China, the USTR raised alarm about government
procurement policy.
 "A troubling trend that has emerged, however, is China's
willingness to encourage domestic or "indigenous" innovation at
the cost of foreign innovation and technologies," it said.
 Democrat Sander Levin, chairman of the U.S. House of
Representatives Ways and Means Committee, pointed to the
government procurement policy as a priority issue for U.S.
Trade Representative Ron Kirk.
 "I look forward to working with Ambassador Kirk to ensure
that the United States takes all necessary and appropriate
steps to eliminate the barriers described in all of these
reports," Levin said.
 The three reports cover a litany of U.S. trade concerns
with all its trading partners, and cover issues for goods
including food, wine, wireless devices, toys and ride-on
 In the new report focusing attention on technical barriers
to trade, the European Union's regulations for chemicals --
affecting sectors ranging from automobiles to textiles -- are
singled out as a major concern.
 While the reports put offenders on notice about U.S.
complaints, solving the problems is the real challenge, noted
Gary Blumenthal of Washington trade consulting firm World
 "The precedence of naming and shaming doesn't work,"
Blumenthal said. "The real key is, is the tactical approach
going to be any different?"
 (Additional reporting by Christopher Doering, Editing by
Sandra Maler and Vicki Allen)