By  on June 12, 2006

WASHINGTON — The new U.S. Trade Representative, Susan Schwab, faces a formidable agenda.

She inherits the pressure cooker that is trade politics and a ballooning trade deficit, which reached $63.4 billion in April, according to a monthly Commerce Department report issued on Friday. The deficit with China alone was $17 billion. In addition, her portfolio is packed with World Trade Organization talks to lower tariffs and negotiations for several free trade agreements with countries such as South Korea.

Schwab, in her first meeting with reporters since being confirmed by the Senate on Thursday, said the trade deficits are the result of a number of factors, including global economic growth and the low savings rate in the U.S.

"It is not cause to be alarmed, but these are big numbers," said Schwab, who promised to aggressively pursue U.S. trading interests when it comes to China.

The numbers are also big in apparel and textiles, where China continued to dominate the U.S. import picture in April, with an 8.6 percent rise to 1.3 billion square meter equivalents, worth $1.6 billion. Taken separately, apparel imports from China fell 16.2 percent to 328.8 million SME, worth $944.2 million, after a big run-up following the elimination of a global system of quotas last year.

In November, the U.S. signed a deal with China that allowed for three additional years of quotas on 34 types of apparel and textile products. Trade in those goods in April was down 56.8 percent from a year earlier.

U.S. producers have been pushing for apparel and textiles to be treated separately in sectoral negotiations within the WTO Doha trade talks, in part to try to secure additional protections from nonmarket economies such as China and Vietnam.

"It's too early to talk about sectorals," said Schwab, noting the focus is on first getting a fundamental agreement for all industrial goods.

On the Doha talks in general, which have shown little progress this year and are locked up over agricultural issues, Schwab had a simple message: "Don't give up yet."

She said, however, that it was "crunch time" as President Bush's trade promotion authority, which allows trade bills to get a vote in Congress without amendments, expires in July 2007."We really have to have the Doha Round totally wrapped up by the end of this year," she said. "Everybody talks about an ambitious outcome. I think there is a serious desire for an ambitious outcome. The question is, is there enough political will to deliver it, and on the part of the United States, there is enough political will."

The global trade talks through the WTO, along with bilateral talks with individual countries and enforcement of trade laws, make up the three pillars of U.S. trade policy, said Schwab.

"I believe all three of these elements are mutually reinforcing," she added.

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