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U.S. concerned over China's WTO progress
By Alex Frew McMillan
HONG KONG, China (CNN) -- U.S. authorities have praised China for pushing ahead with changes stemming from its entry into the World Trade Organization one year ago. But the administration of U.S. President George W. Bush also found problems in three areas and faulted China for not being open enough about how it prepares its regulations. Those troublespots are cause for "serious concern," the U.S. Trade Representative's office said, pledging to push China to follow through on its commitments. China joined the WTO on December 11 last year, after 15 years of negotiations. Since then, it has repealed more than 800 laws, amended others, and eased tariffs, notably in technology, chemicals, cars and car parts, wood products and farm goods. But the report from U.S. Trade Representative Robert Zoellick, the country's trade ambassador, noted that China has problems with compliance, as well. 'A number of causes for serious concern'"While the efforts of China's leadership to implement China's WTO commitments should be recognized, the administration also found a number of causes for serious concern during China's first year of WTO membership," the office said in a report to congress.
The report states that China has a broad problem of "transparency," or openness, in how it prepares new regulations. Some ministries have improved the chance for public comment on draft laws and solicited queries on WTO implementation. But China's overall effort is "plagued by uncertainty and a lack of uniformity," the report said. Beyond that general concern, it found that "three other areas generated significant problems and warrant continued U.S. scrutiny -- agriculture, intellectual property rights and services." Agriculture in particular promises to be an "especially contentious" area between the United States and China, the report states, with serious problems cropping up in biotech regulation, tariffs for bulk commodities, sanitary standards and inspection requirements. On the intellectual property front, China did make significant progress on improving its regulations and laws. But the trade representative's office said the lack of enforcement remains "a major challenge," with China needing to invest considerable resources and political will to the issue. China's service sector has problems with transparency, and the government has imposed restrictions that go beyond international norms, the report states. It said the problem is particularly severe in the insurance industry, where restrictions on capital limits and branching are problematic, and in the express-delivery industry, where existing rights are under threat. Pledging continued changeThe U.S. Trade Representative's office is required to report annually to the U.S. government on Beijing's compliance. It said it would continue to push for change in China.
"The United States, working with fellow WTO members, will use all means at its disposal to ensure that China achieves full implementation," the report said. The WTO is also reviewing China's compliance with its rules. That process will continue each year for eight years, with a final review by year 10. American business has generally given China mixed reviews so far, saying new markets haven't been opened up as fast as expected. The U.S. Trade Representative report noted that it is still early and the process of compliance is complex. It was also muted in its praise of China's efforts so far. "Progress was made both in making many of the required systemic changes and in implementing specific commitments. At the same time serious concerns arose in some areas, where implementation had not yet occurred or was inadequate," the report said. It traced some of the compliance problems to a lack of coordination among the various ministries in China's government. Local and provincial governments have also contributed by not applying WTO rules, or applying them unevenly, it said. Of particular concern, the report stated, Chinese interests have at times tried to minimize exposure to competition from abroad by blocking WTO compliance.
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