China slams U.S. trade curbs

Bill Savadove, Reuters, Beijing

New WTO member China blasted proposed U.S. limits on steel imports and a cut in China's textile export quota on Friday, urging its second biggest trading partner to mend its "mistaken" ways.

"Such a barrier would run counter to the policy of trade liberalization advocated by the WTO," the Xinhua news agency quoted Foreign Trade Ministry spokeswoman Gao Yan as saying three days after China formally joined the World Trade Organization.

"China has always objected to any form of trade protectionism and is unwilling to see normal international trade disturbed by improper trade policies and measures," Gao said.

Last week, the U.S. International Trade Commission recommended increased import tariffs and quota restrictions for up to four years to help the struggling American steel industry regain its footing.

The trade panel will deliver its recommendations to President George W. Bush next Wednesday.

That will begin a 60- to 75-day period for Bush to make a final decision on what, if any, import restrictions to impose.

China hoped the United States would consider the views of other countries and handle the issue "properly", Gao said.

Besides China, top steel suppliers to the United States which could be affected include the European Union, Canada, South Korea, Japan, Mexico, Turkey, Brazil, Russia, Taiwan, South Africa, Argentina and Ukraine.

Although the row predates China's WTO entry, Beijing had previously shown concern about a U.S. investigation into whether foreign imports posed a threat to its domestic producers.

The Foreign Trade Ministry also labeled as unacceptable what it said was a recent cut in China's textile export quota due to allegations from the United States of illegal transshipment by Chinese firms, Xinhua said in a separate report.

It did not give the amount of the cut, or when it was made. The U.S. embassy in Beijing said it could not immediately comment.

The United States made the cut -- which will affect Chinese goods worth US$28 million -- without presenting clear evidence, spokeswoman Gao was quoted as saying.

"The action by the U.S. government is a violation of the bilateral textile agreement and is unacceptable to the Chinese government," she said.

"In the interests of Sino-U.S. economic and trade relations, China requests the United States correct its mistaken act."

Major trading partners are watching carefully to see how China will act as a WTO member and many have expressed fears that trade disputes will rise as the nation becomes more integrated with the global economy.

China and its biggest trading partner, Japan, are already embroiled in an eight month-old trade row that started after Tokyo imposed temporary curbs on imports of Chinese farm products including leeks, shiitake mushrooms and rushes for tatami mats.

China struck back in June with 100 percent punitive tariffs on Japanese cars, mobile phones and air conditioners.

The initial curbs imposed by Japan have expired. But Japanese Trade Minister Takeo Hiranuma said on Friday that Prime Minister Junichiro Koizumi told him to start preparations for long-term import limits on the three Chinese products.