GOP members of Senate Finance Committee urge Geithner and Clinton to press China on key trade issues.
The latest semi-annual U.S.-China Strategic & Economic Dialogue (S&ED) got underway in Beijing today as Treasury Secretary Tim Geithner and Secretary of State Hillary Clinton began meetings with high-level Chinese officials.
While many foresee little of note being accomplished at the talks, nine Republican members of the U.S. Senate Finance Committee (which has jurisdiction over international trade policy) have called on the Obama Administration to use the meetings as an opportunity to resolve serious, ongoing trade problems.
Signing a letter to Secs. Geithner and Clinton were ranking member Orrin Hatch (R-UT), Chuck Grassley (R-IA), Jon Kyl (R-AZ), John Thune (R-SD), John Cornyn (R-TX), Olympia Snowe (R-ME), Mike Enzi (R-WY), Pat Roberts (R-KS), and Mike Crapo (R-ID).
The group's letter includes mention of some of China's more egregious violations of international trade commitments, including intellectual property theft, currency manipulation, and a lack of reciprocity on government procurement.
There's little dount that China's mercantilism and closed market approach pose serious concerns. As the group observed:
For the past three years we have seen too much back-sliding on commitments in China and an alarming change in China’s economic trajectory away from economic reforms and fair competition – and towards State-led capitalism and support for national champions.
Some specifics in the letter:
On the subject of intellectual property theft-- "We cannot allow China – or any country – to steal the value of our intellectual property for its own gain, or we risk losing our greatest advantage in the global marketplace."
On government procurement-- "When China joined the World Trade Organization (WTO) 10 years ago, it committed to join the Government Procurement Agreement (GPA). China’s GPA offers to date have been woefully inadequate. China’s refusal to table meaningful government procurement offers effectively blocks American goods and services from competing for China’s procurement projects. China’s refusal to meaningfully engage on GPA accession also inhibits the United States efforts to get other WTO members to join the GPA."
On currency misalignment-- "China’s massive intervention into its currency market and its sterilization practices are only possible because of the extensive capital controls and investment restrictions it places on the financial sector.
The Senators are right to urge a stronger approach to China, one that can press China toward a "commitment to play by the rules, and a rebalancing of trade and investment between the United States and China."
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