January 13, 2009 / 8:01 PM / 11 years ago

CORRECTED - US says reached dual-use trade deal with China

(Corrects description of Applied Materials Inc. in paragraph 4)

WASHINGTON, Jan 13 (Reuters) - The United States has reached a deal with China clearing the way for full implementation of a trade program for dual-use technology goods, the Commerce Department said on Tuesday.

“We are pleased to have reached this milestone agreement,” Commerce Under Secretary Mario Mancuso said in a statement just one week before the Bush administration leaves office.

“U.S. exporters now have a more streamlined way to export to companies in China who have a record of using U.S. technology responsibly,” Mancuso said.

The agreement is good news for U.S. aircraft manufacturer Boeing Co. (BA.N) and Applied Materials Inc. (AMAT.O), the world’s biggest supplier of machines used to make semiconductors.

The two companies have partners in China cleared to import certain advanced technology goods that also have potential military uses.

The Commerce Department in 2007 imposed new export controls on a targeted list of high-tech goods sought by China’s military, such as lasers, high-performance computers, extreme temperature telecommunications equipment and airborne communication and inertial navigation systems.

At the same time, it established a new “validated end user” program to allow pre-screened civilian companies in China to import certain controlled items without having to obtain an individual Commerce Department license.

Last month, Mancuso said the Commerce Department was considering suspending the program because it had not reached an agreement covering surprise inspection procedures for the five companies in China approved to participate.

The two countries have now reached a pact that “will maximize the security and trade-enhancing benefits of the VEU program and continue a promising chapter in civilian U.S.-China high technology trade,” Mancuso said.

Reporting by Doug Palmer

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