US trade retaliation campaign looks at new target - Beijing

The US has abandoned retaliation against its former economic competitor, Japan, and instead made two allegations of unfair trade against its new rival, China.


A complaint has been made through the World Trade Organisation, less than two months after China premier Hu Jintao visited Washington DC to improve business ties. US Trade Representative Ron Kirk says China unjustifiably imposed duties on US imports of grain-oriented flat-rolled electrical steel. These are made by A K Steel of Ohio and Allegheny Ludlum of Pittsburgh.


China has levied anti-dumping duties of up to 65 percent, plus countervailing duties up to 45 percent on the steel, which is largely used in power stations. Kirk says China has failed to disclose the reasoning behind the calculations and has not produced evidence for its action.


"We are troubled by the procedures and decision-making employed by China in its trade remedy investigations, which have now led to serious restrictions on exports of American steel," Kirk said. "We have watched with growing concern China's resort to additional duties on US exports. It is important to ensure that China is held to the World Trade Organisation (WTO) rules and so prevent any unjustified duties from affecting hundreds of millions of dollars of US steel exports to China."


The second allegation is that the government continued to grant a monopoly to China UnionPay, a payment settlement service, for domestic payments and imposed regulations that unfairly benefited China UnionPay in transactions in foreign currency.


"Removal of the monopoly that China has provided to China UnionPay would create significantly expanded business opportunities in China's huge and growing market for American suppliers of this essential service," Kirk said.


Wang Baodong, spokesman for China's embassy in the United States, said China conducts business "strictly in accordance with its WTO and bilateral commitments. We stand for settling trade disputes with other countries through consultations on an equal footing."
During President Hu's state visit to the US in January, three main agreements were reached: Contracts for US$45 billion in US exports to China, which will support 235,000 jobs in the US; an agreement by China to open its government procurement programmes to foreign companies; and a commitment by China to strengthen enforcement of intellectual property rights.


China is buying 200 Boeing airplanes valued at $19 billion, and Chinese companies have signed 70 other manufacturing contracts worth $25 billion for General Electric locomotives and parts to build commercial trucks and diesel engines under a joint venture there. Commercial heavylift helicopters are also on the list.


In marked contrast to the WTO action, the Federal Maritime Commission has ended a 16-year-old case against Japan. Two US carriers, Sea-Land and APL, alleged in 1994 that the Japanese government was undertaking "discriminatory and restrictive practices" that shut out foreign companies from Japanese ports.
The US objected to restricted port hours (breaks for lunch and no weekend operations) and methods of operation, as dictated by the Japan Harbor Transportation Association. Foreign carriers had to comply with a system of "prior consultation" before making major or minor operational changes, and no foreign companies could own any of the country's terminals.


In September 1995, the US commission fined "K" Line, MOL and NYK $100,000 for each port call of each vessel. Collection of fines began in September 1997 and totalled $3 million.


Japan threatened to impose trade sanctions for the commision action.


Agreement was reached to end the standoff, but the commission ordered the carriers to report any changes in policy by the Japanese government every six months. That requirement has been abolished. The maritime commission says that at least one foreign company has been allowed to operate a terminal in the country, PSA International, owned by Singapore, at the Hibiki Container Terminal at Kitakyushu.


The growing trade gap with China has some bearing on the WTO complaint. The US shortfall with China, its most politically sensitive trade partner, declined to $20.7 billion in December from $25.6 billion in November. In spite of that narrowing, the gap widened to a record $273 billion for the year in 2010. Worldwide US exports rose 17 percent, to $1.8 trillion, which the Commerce Department describes as "right on track" to meet Obama's goal of doubling US exports over the next five years. The overall US trade deficit last year was $497 billion.
(Source:http://www.cargonewsasia.com)