U.S. conciliatory on safety ahead of China summit

BEIJING (Reuters) - A senior U.S. official struck a conciliatory tone on product safety on Monday ahead of high-level talks with China likely to be dominated by U.S. fears of substandard Chinese-made food and drugs.

"Polly Pocket" merchandise sit on a shelf in a store in Arlington, Virginia, August 14, 2007. A senior U.S. official struck a conciliatory tone on product safety on Monday ahead of high-level talks with China likely to be dominated by U.S. fears of substandard Chinese-made food, drugs and toys. REUTERS/Jim Young

The made-in-China label has come under global scrutiny following scares over tainted pet food, toothpaste and fish. In one of the biggest cases, U.S. firm Mattel had to recall millions of toys.

Insisting that Washington and Beijing were working well on safety issues, Secretary of Health and Human Services Mike Leavitt said this was a question of improving the monitoring of imports not only from China but from the rest of the world.

“We think we are on a glide pattern which will produce a successful outcome in our relationship with the Chinese government,” Leavitt told reporters in Beijing where he will sign agreements to strengthen product safety.

Later in the day, however, other Washington officials said the talks with China would also cover U.S. worries about intellectual property protection, market access and Beijing’s efforts to nurture champion companies through industrial policy -- areas where room for quick, tangible progress is less clear.

“Our preference is always dialogue, but we know that in addition to dialogue we have other tools at our disposal,” U.S. Secretary of Commerce Carlos Gutierrez told reporters. “I believe that we have shown that we are willing to use those tools”.

He pointed to U.S. anti-dumping and countervailing duty rules and World Trade Organisation complaints as options when dialogue fails.

Mattel has recalled more than 21 million Chinese-made products in the past few months, adding to a growing tally of similar cases.

Those scandals have provoked protectionist trade calls from some U.S. politicians, already angered by what they see as China’s artificially undervalued currency, the yuan.

“We don’t believe protectionism is good for the U.S. or good for China,” Gutierrez told Reuters.


Food and product safety is likely to dominate cabinet-level Sino-U.S. talks that start on Wednesday just outside Beijing, even if currency issues are on participants’ minds, U.S. Treasury Secretary Henry Paulson said last week.

“Clearly that has been the highest profile of the issues,” U.S. Trade Representative Susan Schwab said of safety worries.

“I suspect that at the end of the day that will end up being the highest profile outcome,” she told reporters of the proposed agreements on product safety.

Adding to the conciliatory tone, Wal-Mart said it had won permission to open its 100th China store and U.S. bearings company Timken unveiled a $38 million joint venture in the southern province of Hunan.

But not all was good cheer.

China has repeatedly warned other countries not to make political capital out of trade rows. They should be dealt with through dialogue on an equal footing, a senior Commerce Ministry official said in remarks published on Monday.

Chen Deming told the official China Daily he was worried the trend towards politicizing trade and economic issues could mount as the November 2008 U.S. presidential election approaches.

Ensuring a proper, fully functioning system was in place to ensure the safety of imports would take time, he said.

“I think there’s a Chinese proverb -- the man who removes a mountain begins by carrying away small stones. This is not going to happen overnight.”

Schwab said she saw no signs of “imminent resolution” of complaints against China that Washington has taken to the World Trade Organisation.

Last month, Beijing settled one WTO case by agreeing to eliminate a dozen tax breaks and other subsidies the United States challenged. But Washington still has WTO litigation over China’s policies on car parts, tax subsidies, and intellectual property enforcement and entertainment distribution.

“We have not received any indication that the Chinese are prepared to address the problems in those three cases,” Schwab said.

Additional reporting by Kirby Chien; editing by Nick Macfie and Roger Crabb