By  on January 31, 2006

WASHINGTON — The Bush administration, facing a record deficit with China and complaints of unfair trade practices from U.S. producers and lawmakers, is pushing China toward a bigger role in the international trading framework.

"China's apprentice period must now come to a close and China must act as a fully accountable participant and beneficiary in the international trading system," Deputy U.S. Trade Representative Karan Bhatia told the U.S.-China Business Council on Wednesday. "China has not played a role in strengthening the international trading system commensurate with its commercial heft and with the benefit it has obtained from that system."

China joined the World Trade Organization in 2001 and benefited significantly from the elimination of apparel and textile quotas last year. However, Bhatia described China's track record as a member of the global body as mixed, with some of its obligations left unfulfilled.

Thanks partly to China's WTO membership, two-way trade with the U.S. mushroomed to about $286 billion last year, contributing to a projected trade deficit for the U.S. of $200 billion.

"An imbalance of this magnitude is not sustainable, either economically or politically, over the long term," Bhatia said.

As China continues to develop as a trading partner, Bhatia said it must work to rein in "rampant intellectual property rights violations" and address nontariff barriers that make it difficult for U.S. companies to do business in China.

"We will continue to press China to address policies that make it difficult and often impossible for our competitive domestic companies to compete against unfairly subsidized Chinese exports," he said.

U.S. textile companies often complain the industry cannot compete with goods made in Chinese factories that are supported by the government. They also argue that China's currency policies keep the yuan undervalued, making the country's goods even less expensive in the U.S. market.

"The United States will not hesitate, when appropriate, to use all tools at its disposal to ensure that China lives up to its commitments, including dispute settlement at the WTO or the use of trade remedies within our own legal system," Bhatia said.

Despite the tough talk, Bhatia acknowledged a significant upside to trade with China and described the relationship between the two countries as "enormously important."

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