15 September 2003
Evans Notes China's Shortcomings on Trade Commitments
Commerce Secretary's September 15 remarks in Detroit
In a speech before the Detroit Economic Club in Michigan September 15, Commerce Secretary Don Evans said the Bush administration feels China is falling short in meeting its trade commitments.
Evans said U.S. manufacturers have "complained about rampant piracy of intellectual property; forced transfer of technology from firms launching joint ventures in China; trade barriers; and capital markets that are largely insulated from free-market pressures."
Evans also noted that American businesses are "still waiting" for the Chinese government to allow non-bank entities to establish financing arms so that Chinese consumers can purchase automobiles, a condition to which the Chinese government agreed when the country became a member of the World Trade Organization (WTO) in December 2001.
Evans added that the promise of "free access to established distribution systems for American goods," also part of China's WTO agreement, also remains unfulfilled.
Evans repeated the Bush administration's call for China to move to a system in which its currency, the yuan, is freely set by market forces.
"China is also one of the world's largest markets with vast opportunities for American manufacturers, provided, of course, that China's markets are actually governed by real, free, and fair market forces," he said.
Following is an excerpt of Evan's remarks, as prepared for delivery:
(begin excerpt)
Remarks by
COMMERCE SECRETARY DON EVANS
TO THE DETROIT ECONOMIC CLUB
SEPTEMBER 15, 2003
[As prepared for delivery]
... Finally, the President has made a particular point of saying that we are going to enforce international trade laws to ensure that competition is fair.
During our round tables, no country raised more attention as a source of concern than China.
Concerns ranged from inadequate access to China's markets to the lack of a level playing field in many areas.
Now, it is important to keep our relationship with China in perspective. China has provided help on a number of fronts -- from the arms talks with North Korea to the War on Terrorism.
On the economic front too, China has helped as well. Along with the United States, China accounts for most of the current growth in the world economy.
In addition, it is worth underscoring that the Chinese import more from the United States than many of our other trading partners.
The world has a vested interest in China's success. China has lifted millions of people from poverty by taking important steps toward capitalism -- but they have a long way to go.
China is also one of the world's largest markets with vast opportunities for American manufacturers, provided, of course, that China's markets are actually governed by real, free, and fair market forces.
This administration believes that currency values should be set by free-market forces. And, two weeks ago, Treasury Secretary Snow conveyed exactly that message to the Chinese government.
Manufacturers complained about rampant piracy of intellectual property; forced transfer of technology from firms launching joint ventures in China; trade barriers; and capital markets that are largely insulated from free-market pressures.
Here is one example. Wrigley chewing gum has a 70 percent share of the Chinese market. A Wrigley official told us that the Chinese had pirated their products in the city of Guangzhou.
The pirates were selling counterfeit gum. They copied the Wrigley truck. They drove Wrigley's distribution routes.
And when they called on Wrigley's accounts, the pirates paid "premiums" to the shopowners for accepting the counterfeit gum. That's a pretty ugly story.
Under the WTO agreement signed in December of 2001, China agreed to let non-bank entities establish financing arms so their consumers could purchase automobiles.
We're still waiting.
They also promised free access to established distribution systems for American goods.
We're still waiting.
But we won't wait idly. We will work to ensure that China honors the commitments it makes.
It is strongly in the interests of the global economy that China creates an economic system that is more dynamic, growing, transparent, and one that allows capital to flow freely in response to market forces.
The transcripts from our manufacturing roundtables speak for themselves. Unfortunately, it took an economic downturn to demonstrate the full weight of the burden.
Americans are willing to compete, on even terms, with any country in the world but we will not stand for unfair competition. We are going to aggressively target unfair trade practices wherever they occur.
American manufacturers can compete against any country's white collars and blue collars but we will not submit to competing against another country's choke collars....
(end excerpt)
(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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