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WTO: China should reconsider currency plan
(Reuters)
Updated: 2006-03-17 19:17
Senators Charles Schumer, a New York Democrat, and Lindsay Graham, a South Carolina Republican, are sponsoring legislation that would impose across-the-board penalty tariffs of 27.5 percent on Chinese goods unless the Chinese stop the practice.
Congress could take "extreme action" if Beijing does not move soon toward economic reform, Graham told a congressional advisory panel Thursday.
The administration of U.S. President George W. Bush also has been stepping up the heat on China over intellectual property rights. U.S. officials say rampant Chinese copying of movies, music, software and other goods costs legitimate products worldwide up to US$50 billion (euro41 billion) annually in lost potential sales.
Last month, U.S. Trade Representative Rob Portman (news, bio, voting record) announced the creation of a new China enforcement task force in his office and indicated that without progress soon on piracy, as well as high Chinese tariffs imposed on American auto parts, the administration would probably file unfair trade cases against China before the WTO.
The Geneva-based trade organization said "effective enforcement of intellectual property rights is also needed to ensure an investment environment conducive to the development of an innovative private sector and foreign investment."
"Steps have been taken to ensure better enforcement and coordination between the various government agencies involved in enforcement," the WTO said. However, China's relatively low fines and lenient penalties "appear insufficient to deter (intellectual property rights) violations."
The summary did not address Chinese policy on automotive parts specifically, but said Chinese manufacturing has boomed partly as a result of government assistance and public investment.
"The result is that manufacturing, especially export-oriented manufacturing, has developed more rapidly than other sectors," the WTO said.
The European Union also has moved recently to counter what it calls unfair trade practices by China. On Thursday, the 25-nation EU announced it would soon slap duties on Chinese and Vietnamese shoes, acting against a flood of cheap imports that it says breaks world trade rules.
Four majority state-owned banks hold 54 percent of banking assets in the country and insurance is dominated by six state holding companies accounting for 85 percent of all premiums, the WTO noted.
In telecommunications, six majority state-owned companies dominate basic services, even if private firms are largely responsible for value-added services. Air and maritime transport services are similarly controlled by majority or fully state-owned enterprises, WTO said.
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