The Bush administration was pushing for concrete results to show to an increasingly restive Congress, where lawmakers blame America’s soaring trade deficits and the loss of one in six manufacturing jobs since 2000 in part on China’s trade practices in such areas as currency manipulation and copyright piracy.
The US delegation also raised the issue of food safety highlighted by such incidents as the deaths of pets who had eaten pet food made with tainted wheat gluten imported from China.
US Trade Representative Susan Schwab, who briefed reporters on the discussions, said food safety was raised over breakfast by Agriculture Secretary Mike Johanns and Health and Human Services Secretary Michael Leavitt.
“They know this is an issue that concerns us and concerns the American people,” said Commerce Secretary Carlos Gutierrez, who said the issue would be addressed more formally in a later session before the talks conclude on Wednesday.
In opening remarks delivered in an ornate government auditorium decked out in flags from both nations, Chinese Vice-Premier Wu Yi cautioned the United States against pursuing a blame-game.
“We should not easily blame the other side for our own domestic problems,” Wu said, speaking through an interpreter. “Confrontation does no good at all to problem-solving.”
Wu, who gained a reputation for tough speaking when she was China’s top trade negotiator, said that both sides should “firmly oppose trade protectionism”. She said that any effort to “politicise” the economic relationship between the two nations would be “absolutely unacceptable”.
Wu and her delegation were scheduled to meet behind closed doors on Thursday with key leaders of Congress, including Nancy Pelosi, the leader of the House of Representatives who has been a vocal critic of China’s human rights policies. Lawmakers are pushing a variety of bills that would impose economic sanctions on China in the wake of a trade deficit with China that last year hit $232.5 billion, accounting for one-third of America’s total record deficit of $765.3 billion.
Treasury Secretary Henry Paulson created the Strategic Economic Dialogue last year as a way to get the countries’ top policymakers together twice a year to achieve results that will ease trade tensions. The first meeting was held in Beijing last December.
Breakthroughs at this meeting were expected in the area of cutting tariffs on sales of American energy technology products and services in China and increasing US airline passenger and cargo flights to China.
However, success in another area— getting China to boost the stake that American firms can own in Chinese financial service companies— seemed less certain. The current cap on foreign ownership of Chinese banks is 25 percent.
US officials tamped down expectations of any big outcomes, saying the meetings were not meant to be negotiating sessions.
But Gutierrez said there was impatience on the US side. He spoke of the “need to make progress in all areas as soon as possible”.
Addressing the rising anger in Congress, Schwab said, “This is not necessarily reflective of more protectionism or anti-Chinese sentiment, but rather that there are concerns there and we need to be responsive.”
American manufacturers contend that China is manipulating its currency to keep it undervalued against the dollar by as much as 40 per cent, making Chinese goods cheaper in the US market and American products more expensive in China.
But there was no expectation of further progress in this area after China’s surprise announcement last Friday that it was slightly widening the range its currency could move against the dollar in a single day from 0.3 per cent to 0.5 per cent. Critics were unimpressed by the small widening of the currency band.—AP