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Big deficit prompts U.S. to rethink policy on trade
Miami Herald
Bloomberg News Service
February 15, 2006

WASHINGTON - The Bush administration Tuesday reiterated its concern about the record trade deficit with China and said it will refocus its policies toward the Asian nation, which will include the hiring at least a dozen new people to help ensure China's compliance with trade rules.

China must open its market to more imports, crack down on the piracy of copyrighted goods and curb subsidies to exporters in order to lower its record trade surplus with the U.S., the U.S. Trade Representative's office in Washington said in a 29-page review of trade policy toward China.

"Our bilateral trade relationship with China today lacks equity, durability and balance in the opportunities it provides," U.S. Trade Representative Rob Portman said in a statement before the start of a news conference. "The time has come to readjust our trade policy with respect to China."

The trade office said much of its focus will involve:

Fair market access for telecommunications, financial services, healthcare and direct-sales companies; subsidies; labor law; regulatory transparency; and environmental protection.

New staff will need to be hired in Washington and Beijing, and improvements made in gathering and reviewing trade data, the trade office said.

The details of the administration's new approach follows increasing criticism from Democrats in Congress, labor unions and some small manufacturers that the Bush administration hasn't done enough to curb what they call China's unfair trading practices.

The United States logged a record $202 billion trade deficit with China last year, accounting for more than a quarter of the overall U.S. trade gap, the Commerce Department said Feb. 10.

"The enormous scope and scale of the changes that have occurred in China's trading posture and in our bilateral trade relationship pose continual challenges," the report said.

The Bush administration is trying to head off proposals in Congress to impose punitive tariffs or import quotas on Chinese goods, proposals the administration says would undermine the benefits of commercial engagement with China. The administration at the same time is laying out specific changes the Chinese should take to allow more U.S. exports and narrow the trade gap.

Many of the items listed in the report have been highlighted repeatedly by the administration in the past year. By listing all in one document, the U.S. increases pressure on China and signals to lawmakers that it's taking their concerns to heart, an analyst said.