US trade bill 'breaks W.T.O. rules'
Claiming that a US trade bill targeting Chinese exports violates World Trade Organisation rules, China's commerce minister said yesterday that his country was not obligated to follow the mandate.
US President Barack Obama is set to sign the bill into law to empower the US Department of Commerce to impose duties on subsidised goods from China and Vietnam, a move that the White House says will protect American jobs.
Speaking for more than three hours at a news conference during the annual session of the National People's Congress, Commerce Minister Chen Deming reiterated that China would abide only by rules of the international organisations it had joined.
'In terms of economics and trade, for example, we follow the rules of the WTO, but we have no obligation to follow domestic laws or regulations in any specific country that are not in line with the rules of international organisations,' Chen said.
Defending against accusations that China has subsidised exports, Chen said such practices were 'actionable subsidies' allowed under WTO rules, and he pointed out that Washington had also subsidised US carmakers in the form of bailouts.
Late last month, Obama signed an order to create a 'trade enforcement unit' tasked with investigating and countering unfair trade practices around the world to protect American business interests abroad.
Chen said China would be keeping a close eye on the US task force.
'We are paying close attention to its operations and watching to see whether it obeys the rules of international trade,' Chen said, adding that Beijing hoped to co-operate with it.
Additionally, he pledged to protect the legitimate interests of Chinese corporations and the country in accordance with the law.
China is also studying the US-initiated free-trade agreement known as the Trans-Pacific Partnership, which according to some Chinese academics sets standards that Beijing would not accept and were aimed at isolating the world's second-largest economy and largest exporter.
Regarding the European sovereign-debt crisis, Chen said Europe could recover, but it might take some time for its efforts to bear fruit.
Europe, he said, should boost employment while implementing austerity measures. He added that China had already begun expanding imports from Europe and investing in the region, which would help provide more jobs there.
Chen also revealed that export targets in first two months of this year did not meet expectations, but he still expected the country to meet its official target this year of a 10 per cent rise in foreign trade.
Preliminary data last month showed that China's exports and imports were on track to increase by 7 per cent this year.
Foreign trade in the first two months of last year totalled US$495.83 billion, representing a 28.3 per cent year-on-year growth from 2010. China's exports slowed from a year-on-year growth of 27.8 per cent in August to just 12 per cent in December.
Chen said the country's foreign trade still faced challenges, including from uncertainties in some developed countries and rising labour costs at home. He said the government would reduce the tax burden on struggling exporters.
'If we issue new policies, they will include incentives for foreign trade instead of restrictive measures,' Chen said.
Commenting on US criticism on the yuan's exchange rate, Chen said all countries should strive to keep the exchange rates of their currencies stable amid the backdrop of the global financial crisis. Deliberately devaluing or strengthening a currency was 'not desirable' and would undermine economic recovery.
Chen said China's upcoming talks with Japan and South Korea on a free-trade agreement would strengthen East Asian trade ties, but not at the expense of international liberalisation.
'If these three countries - China, Japan and South Korea - can have their own FTA, then we will accelerate the entire process of economic integration in East Asia,' Chen said as the three nations prepare for a mid-May summit in Beijing to launch negotiations on the tri-party pact.
Chen said Tokyo's decision to participate in the US-backed Trans-Pacific Partnership would not negatively affect Japan's engagement in other regional initiatives.