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U.S. Critical of China in Last WTO Transitional Review

Monday, December 05, 2011
Sandler, Travis & Rosenberg Trade Report

U.S. Ambassador to the World Trade Organization Michael Punke offered a sharp criticism of Chinese trade policies Nov. 30 in remarks given as part of the tenth and final transitional review of China’s accession to the WTO. Punke acknowledged that China has made “tremendous progress” in implementing a “sweeping set of commitments” but asserted that most of it took place in the first five years after accession. Since then there has been “a troubling trend … toward intensified state intervention in the Chinese economy,” he said, and in fact “China seems to be embracing state capitalism more strongly each year.” Punke placed most of the blame for trade frictions with China on its “pursuit of industrial policies that rely on trade-distorting government actions to promote or protect China’s state-owned enterprises and domestic industries,” and he warned Beijing to “reconsider the path it is on.”

Punke also drew attention to “the perception among WTO members that Chinese government authorities at times use intimidation as a trade tool.” For example, “China’s trading partners have heard from their enterprises on too many occasions that Chinese regulatory authorities threaten to withhold necessary approvals or take other retaliatory actions against foreign enterprises if they speak out against problematic Chinese policies or are perceived as responding cooperatively to their governments’ efforts to challenge them.” There also appears to be an emerging pattern of “the Chinese government’s reflexive resort to trade actions in response to legitimate actions taken by the United States or other trading partners under their trade remedies laws.” Punke said the U.S. “strongly urges” China to take the steps necessary to “eliminate any basis for these adverse perceptions.”

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