US signals a truce amid the war of words over trade

PUBLISHED : Saturday, 22 November, 2003, 12:00am
UPDATED : Saturday, 22 November, 2003, 12:00am

America's commerce secretary says there is a 'suite of options' for talks

The United States has softened its tone towards China amid their escalating war of words over trade. The two sides could sit down and work out a reasonable compromise, Commerce Secretary Don Evans said.

He told Reuters he saw a range of solutions to combat surging imports from China. This week, the US administration, under pressure to protect American jobs in the run-up to next year's presidential election, invoked a World Trade Organisation provision to impose import quotas on Chinese-made bras, dressing gowns and knitted fabric, igniting simmering tensions.

'There's a whole suite of options as to how we can look at this issue,' Mr Evans said. 'We will work with the [textile] industry and we will work with China.'

Talks with China could begin in the next 45 days, he said.

In addition, a spokesman for the US embassy in Beijing said the US planned to engage in a dialogue with Chinese officials and 'seek a mutually satisfactory solution to the future growth of China's exports'.

While neither statement signalled an end to the dispute, taken together they suggested a process of conciliation that could avoid a rising level of import duties and quotas that would be harmful to trade, said Lester Ross, of law firm Paul, Weiss, Rifkind, Wharton and Garrison in Beijing.

'The big issue from the US point of view is whether this constitutes the first of an escalating series of protectionist measures,' Mr Ross said.

Meanwhile, China had to decide whether to 'accept what is a rather mild and limited measure addressing a dramatic surge in imports or adopt a tit-for-tat response, which will only escalate the problem', he said

The more low-key remarks from the US side may have been a response to the increasingly harsh language from China, which sees America becoming more intransigent about the trade gap.

On Thursday, US Ambassador Clark Randt was called to an emergency meeting by Vice-Minister of Commerce Ma Xiuhong, a day after Mr Randt had spoken to foreign affairs vice-minister Zhou Wenzhong, the Xinhua news agency said.

Mr Ma said China 'hopes the US will fully recognise the negative impact on normal trade between the two countries caused by abusing safeguard measures on fabric products', and urged America to withdraw 'its wrong decision'.

Speaking in Beijing yesterday, Yu Guangzhou, another vice-minister of commerce, defended China's trade record, saying it had stuck to its WTO commitments. As proof, he said general import duty levels had dropped more than 4 percentage points since it joined the 147-nation body. He was quoted by Xinhua as saying China planned to lower tariffs still further.

Mr Yu told visiting Swiss President Pascal Couchepin that China's average import duty had dropped to 11 per cent this year, compared with 15.3 per cent before 2001. The average import duty on industrial goods had fallen to 10.3 per cent this year, from 14.7 per cent before 2001, the vice-minister said, and would drop to 9.3 per cent by 2005.


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