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US, China hold trade talks amid heated auto parts dispute

by Staff Writers
Yorba Linda, California (AFP) Sept 16, 2008
The United States and China were to hold cabinet-level trade talks in California Tuesday amid tensions over China's massive export surplus and an escalating WTO auto parts dispute.

US Secretary of Commerce Carlos Gutierrez and US Trade Representative Susan Schwab were hosting Chinese Vice Premier Wang Qishan for the one-day meeting at the Richard Nixon presidential library in Yorba Linda.

Gutierrez and Schwab are to co-chair the talks with Wang, who heads Chinese economic and trade affairs. US Secretary of Agriculture Edward Schafer is also to participate in the session.

The meeting marks the 25th anniversary of the US-China Joint Commission on Commerce and Trade (JCCT), a bilateral dialogue usually held in the countries' capitals.

The venue recognizes the contribution Nixon, who in 1972 was the first US president to visit China since the People's Republic of China was established in 1949, made to opening up a dialogue between the Cold War rivals.

The Commerce Department said late last week the agenda would focus on three main issues: market access, intellectual property rights and transparency.

But bilateral trade tensions cranked up a notch Monday after the World Trade Organization said that China had appealed the trade body's July decision that its tariffs on car part imports were "inconsistent" with established rules.

The appeal came just hours before the WTO's Dispute Settlement Body (DSB) was due to meet to formally adopt the ruling on its car imports.

The United States, Canada and the European Union had filed the WTO complaint.

"We've got a long agenda of topics we're going to talk about," Schwab told AFP on arriving late Monday for a private dinner with trade talk participants at the Nixon library.

Asked whether China's appeal of the WTO ruling on auto parts would be discussed, the lead US trade negotiator said that "generally we don't talk about issues that are subject to litigation."

"The focus is going to be on transparency, on increasing cooperation on addressing disputes so that they don't ultimately end up in litigation," she added.

The talks come in the sunset of George W. Bush's Republican eight-year presidency that has seen trade disputes with China over a host of issues, ranging from copyright infringement, automobile parts and investment barriers to toxic toys and pet food.

The arrival of a new US president in office in January usually means a shift in the lineup of US trade officials.

The world's largest economy and Asia's superpower squared off in their corners in the failed attempt in July to get the World Trade Organization's Doha Round of negotiations off the ground.

The bilateral trade talks come amid longstanding US concerns about China's currency, the yuan, which critics say is kept undervalued, and its bulging trade surplus.

US officials repeatedly have raised the issue of the value of the yuan, which some say is artificially low and thus a factor in the massive trade imbalance between the two countries.

The United States is saddled with a ballooning trade deficit with China, which hit a record 256.2 billion dollars last year.

The yuan has appreciated by around 20 percent against the dollar since China delinked its currency from the greenback in July 2005.

Critics say China maintains its yuan currency undervalued to bolster exports, and US lawmakers blame outsourcing to China for the loss of thousands of jobs.

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Walker's World: The BRICs crumble
Beijing (UPI) Sep 15, 2008
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