Schwab's visit underscores China's mediating role in stalled talks
Source: Xinhua net Date: 2006-08-31
The United States Trade Representative Susan Schwab wrapped up her first visit to Beijing on Tuesday with China emerging as the best possible mediator the U.S. could find to help resume the stalled Doha Round of trade talks.
Instead of pressing China to further revalue its currency, the Renminbi, or lambasting China for its record on intellectual property rights, the newly appointed trade representative has played down the disputes in bilateral trade and given China credit for boosting the U.S. economy.
"We are now, ourselves, major beneficiaries of China's rapid development. The U.S. manufacturers, farmers and service providers have seen U.S. exports to China grow an average of 22 percent a year since China joined the WTO in December of 2001, and The U.S. consumers enjoy access to a wide array of high-quality, competitively priced products," she said at an event hosted by American Chamber of Commerce on Tuesday.
The day before, during a meeting with Chinese Commerce Minister Bo Xilai, she urged China to play a bigger role in reviving the world's multilateral trade system.
The U.S. has born the brunt of the blame for the collapse of the Doha Development Round talks in July as all other five key participants -- Europe, Japan, Australia, India and Brazil -- criticized it for inflexibility in reducing farm tariffs and subsidies.
"To remedy the situation and safeguard US's economic clout, the World's largest economy is liable to rekindle the multilateral trade talks, and China appears to be the best helper," said Zhang Yansheng, director of the Foreign Economic Research Department of the Macro Economic Research Institute of the National Development and Reform Commission.
Among the 149 WTO members, China, the largest developing nation in the world, could benefit from both the reduction of farm tariffs and subsidies by Europe and the U.S. and the opening-up of the service sector by India and Brazil.
This special position would allow China to mediate and explain why Schwab called China "an important WTO member and a major beneficiary of the Doha Round talks", Zhang noted.
When it comes to cutting farm subsidies and tariffs, China doesn't face strong political pressure like the U.S. and Europe and has already thrown open its farm market. With its exports focusing on primary farm produce and labor-intensive textiles, China is a net importer of beans and cotton and sees rapid growth in the import of dairy produce and forage.
China has promised to fully open its service industry by Dec. 11 and stands as a classic example that an open economy leads to prosperity.
Schwab didn't stint in her praises for the achievements of China's opening up and economic reform. She stressed that over the past 20 years, China's economy had grown by nearly 10 percent a year and experienced a total growth in real gross domestic product of over 500 percent.
"Importantly, the people of China had benefited greatly from its engagement with the rest of the world, with an estimated 377 million people lifted out of poverty," she said.
Professor Zhang Hanlin, with the University of International Business and Economics, said Schwab's generosity in complimenting China predicated stronger cooperation between the two countries.
Through "quiet" conversations as the trade representative remarked on Tuesday, China and the U.S. have taken solid steps in resolving bilateral trade disputes over the past few months.
For instance, China agreed in April to reopen its market to U.S. beef, eliminate duplicate testing and certification requirements for imported medical equipment and to improve market access for telecommunications service providers.
In term of the protection of intellectual property rights (IPR), China announced that its computer manufacturers would be required to install legal operating system software on all computers before they left the factory, and committed to close optical disc plants that produced pirated CDs and DVDs.
The collaboration among IPR law enforcement bodies was also brisk. Earlier this year, Chinese and the U.S. agencies jointly cracked an international pirating ring. In December, a group of Chinese officers will be trained in the United States, according to the Ministry of Public Security.
During his talk with Schwab, Bo Xilai said China was willing to work with other parties to try to revive the Doha Round of global trade negotiations as it would benefit a majority of the WTO members.
He also expressed China's concerns over the recognition of China's market economy status, the easing of U.S. export controls, visas for Chinese businessmen and cooperation in tourism and quarantine services and received positive response.
Zhang Hanlin said China had revealed its potential as a builder and coordinator of the multilateral trade system during last year's Hong Kong meeting where a last-minute agreement on a Swiss formula to calculate tariff reductions led to the Kong Kong Declaration and allowed the talks to advance.
"Communication and cooperation are the right approach to improve commercial ties either bilateral or multilateral. However difficult the situation may be, start with the basics and show your sincerity. It will make a change, " he said.
