US could scrub US-China trade meet in April

The United States could cancel a high-level trade meeting with China scheduled for late April if Beijing does not show progress soon on a variety of disputes, a US official said.

US Commerce Undersecretary Grant Aldonas told US business leaders "it may not be worth having a meeting" unless China demonstrates it is serious about addressing US concerns about counterfeiting of patented and copyrighted products and discriminatory tax policies toward foreign semi-conductors.

China's record $124 billion trade surplus with the United States has become an issue in the US presidential campaign. Expected Democratic presidential nominee John Kerry has accused President George W. Bush of not doing enough to prevent US job losses to the Asian manufacturing giant.

The current "sulfuric" atmosphere on trade in the United States makes it essential that next month's meeting in Washington of the US-China Joint Committee on Commerce and Trade produce concrete results, Aldonas said.

Aldonas said he and Deputy US Trade Representative for Asia Josette Shiner would travel to China next week for a final "hard negotiating session" before the April meeting.

He told reporters one "good concrete action" China could take is to use its vast foreign exchange reserves to buy US computer software to replace illegal copies now being used by Chinese government agencies and state-owned enterprises.

The United States also wants China to end a value-added tax rebate program that its says discriminates against foreign suppliers and to change a proposed encryption standard that threatens to block imports of US-produced wireless computers, cell phones and pagers, Aldonas said.

Washington may ask Beijing for formal consultations on the VAT rebate scheme within coming days, Aldonas said.

That would be the first step in formally launching a complaint at the World Trade Organization.

The US-China Joint Committee is led on the US side by Commerce Secretary Don Evans and Trade Representative Robert Zoellick and on the Chinese side by Vice Premier Wu Yi.

"We need a success, frankly, in this most important trading relationship," Aldonas said at a meeting of the President's Export Council. "We don't need a failure." (Reuters)