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A senior US trade official said that he is optimistic about Sino-US trade relations but also realistic about the challenges they face.

 

"Our economies are growing increasingly interdependent every day. We meet more frequently with our Chinese counterparts and I believe that both sides understand the importance of making this relationship work," Deputy US Trade Representative Karan Bhatia told scholars and students at the Shanghai Institute of Foreign Trade yesterday.

 

Bhatia is scheduled to arrive in Beijing today for talks with his Chinese counterparts ahead of the US-China Joint Commission on Commerce and Trade (JCCT) meeting to be held in Washington DC early next month.

 

Bhatia said China deserves credit for making substantial reforms as part of its WTO commitments, and that US policy must be reoriented to deal with China.

 

"As mature trading partners, there is a long list of important issues on which we believe the US and Chinese governments need to make more progress," he said.

 

"Market access, the protection of intellectual property rights, subsidies and transparency are some of the main issues."

 

Bhatia said the Bush administration is committed to using cooperative bilateral mechanisms such as the JCCT to the fullest extent possible to resolve bilateral trade and economic issues. But he also believes it is natural for the two countries to have their differences on a large number of issues.

 

Those, according to Bhatia, need to be addressed through such means as WTO dispute settlement proceedings. He refused to name specific issues in which the US thinks it has a strong case at the global trade body level.

 

Bhatia dismissed worries that a more vigorous enforcement effort would upset the bilateral relationship, or even lead to a trade war.

 

"My answer is no. Trade wars arise when you don't have dispute settlement mechanisms," he said.

 

Bhatia also warned about the threat of protectionism in both countries.

 

"In the US, there are those on both sides of the political spectrum who seek to close down the US market to China," he said.

 

In recent months, legislation has been mooted in the US including proposals to impose high tariffs on Chinese imports unless China revalues its currency. If passed, they could have a serious adverse effect on Sino-US trade and investment.

 

In China, calls have been made for new policies and regulations to restrict market access to foreign firms, particularly in the services sector. There have also been increased demands for protection and other forms of government support for domestic companies.

 

Bhatia said the US is looking forward to overcoming these challenges, and creating even stronger commercial and political ties in the years to come.

 

"If this is to be the Pacific century, both China and the US will play important roles."

 

(China Daily March 22, 2006)