Washington, DC, September 29, 2006--As a mature member of the World Trade Organization, China should be expected to comply fully with its international trade commitments, but it is not doing so, according to testimony today by the National Association of Manufacturers Director for International Business Policy Bill Primosch.
Testifying before the interagency Trade Policy Staff Committee, Primosch identified currency undervaluation, counterfeiting, subsidies, value-added tax (VAT) concerns, and deficiencies in the regulatory process as particular problems for U.S. manufacturers striving to compete with China and sell more U.S. products there.
“A large, fast growing economy still in transition from a state controlled system to one based on market principles, China presents unique challenges as well as opportunities,” Primosch said. “U.S. exports to China are growing at a rapid rate, up 36 percent in January-July 2006 over the same period in 2005, and China may surpass Japan this year as the third largest market for U.S. products. But despite the export growth, bilateral trade is still highly unbalanced, with the trade deficit in 2006 likely to well exceed the $201 billion record set last year.”
The U.S. needs to “vigorously” enforce its rights in the WTO, Primosch said. “Failure to do so will have serious consequences for U.S. manufacturers, both companies that export to China and those that compete against Chinese-made products in the U.S. and global markets.”
Primosch said the NAM is seeking further pressure on China to move quickly toward greater market flexibility on its currency, more criminal prosecutions of persons engaged in counterfeiting U.S. products, in-depth investigations of Chinese subsidies and value-added tax (VAT) administration, and greatly improved transparency in China’s regulatory and standards-setting process.
