US, China trade talks to be overshadowed

Agence France Presse

Beijing, April 18:

China’s vice-premier Wu Yi heads to Washington this week for talks with US trade representative Robert Zoellick and commerce secretary Don Evans, and a slew of high-profile issues are on the agenda. But despite her reputation as a tough-talking ‘Iron Lady’, Wu’s visit may end up being nothing more than a talking shop with little concrete progress made.

Analysts say November’s US presidential and congressional elections weigh heavily on the Bush administration’s attitude towards ironing out problems in the trading relationship.

New sources of friction such as China’s tax rebates for domestic chip manufacturers and its plans to impose a new wi-fi standard, as well as old chestnuts such as the exchange rate, ballooning US trade deficit, counterfeiting, and high-tech exports to China will be the focus of the talks.

They get underway on Wednesday and Thursday within the framework of the Joint Commission on Commerce and Trade. “US-China relations are going through a bit of a rough patch at the moment,” said Robert Broadfoot, managing director of Political and Economic Risk Consultancy in Hong Kong, “Both sides are going to score some points, but they’re not going to resolve any of the issues.” Some members of the Bush administration, business and trade union leaders blame China for stealing US jobs and exercising unfair trading policies such as currency manipulation to attract jobs and boost export competitiveness. Despite March data suggesting that US companies have finally started hiring again, the issue of jobs being outsourced to low-cost countries such as India and China remains a focal point of electoral debate. “It’s the issue of the day,” Jim Gradoville, chairman of the American Chamber of Commerce in China, said.