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Remarks of Ambassador Ron Kirk Before The Senate Finance Committee Regarding the U.S. - China Economic Relationship

WASHINGTON, D.C. – Today, United States Trade Representative Ron Kirk testified before the Senate Finance Committee regarding the U.S. – China economic relationship. Following are Ambassador Kirk’s remarks as prepared for delivery:   

“Chairman Baucus, Ranking Member Grassley, Committee members, thank you for this opportunity to discuss the complex and evolving trade and economic relationship between the United States and China. As you have said, Mr. Chairman, America’s interests require us to approach China in a strategic and well-coordinated manner.   

“That is why the Obama Administration is speaking with one voice, pressing for change with enhanced dialogue, enforcement of America’s WTO rights, and negotiations that include key trading partners wherever appropriate. Secretaries Geithner, Clinton, Vilsack, Locke and I are working together with the White House in the Strategic and Economic Dialogue (S&ED), and Secretary Locke and I are driving the Joint Commission on Commerce and Trade (JCCT) to achieve a more robust and outcome-oriented relationship.   

“USTR’s work is driven by our mission to open markets, enforce America’s trade rights, and dismantle obstacles that could cripple opportunities for American workers, farmers, ranchers, manufacturers and service suppliers.   

"Since joining the World Trade Organization (WTO) in 2001, China has made many important economic reforms, removed trade barriers, and opened markets to U.S. exports. This has created new opportunities for Americans, as manufactured goods exports to China have tripled. China’s strong recovery from the global recession has facilitated recent double digit growth in American export sectors from manufactured goods and chemical products to agricultural goods. China is now America’s third largest export market for goods.   

“However: China’s implementation of its WTO commitments is incomplete. We have serious concerns about Chinese policies that limit market access or otherwise skew the playing field in our trade relationship. We are addressing these concerns by setting clear priorities and working in results-driven dialogues.   

“Top priorities include addressing indigenous innovation and other discriminatory industrial policies -- often intended to benefit state-owned enterprises -- that limit our exports, as well as improving enforcement of intellectual property rights, ending non science-based regulations that block U.S. agricultural exports, and obtaining increased services market access. These issues will top the agenda at the revitalized JCCT this fall. The 2009 JCCT achieved important progress including restored market access for American pork products and removal of troubling rules affecting sales of information security products. We are also working through the WTO Doha negotiations toward better market access for U.S. firms in the multilateral context.   

“I also know this Committee is concerned about China's currency practices. President Obama called China’s recent currency decision “a constructive step that can help safeguard the recovery and contribute to a more balanced global economy.” He will discuss these and other issues with China at the G-20 Summit in Toronto. While Treasury Secretary Geithner welcomed China’s announcement, he said that the test is ‘how far and how fast the Chinese let the currency appreciate.’ He will continue to monitor and raise this issue.   

“Mr. Chairman, you recently suggested the Administration should be willing to take strong action on trade issues regarding China. We are prepared to use the full range of enforcement options when dialogue fails. We have been by far the most active – and successful – WTO Member in bringing WTO dispute settlement cases against China. Our most recent case challenges China’s use of export restraints on key raw materials, which hurts workers and companies in the U.S. steel, aluminum and chemicals sectors.   

“We will continue to coordinate with interagency partners and with you, to execute a comprehensive and effective China strategy. That includes addressing the challenges posed by China’s macroeconomic policies and pressing China to change its growth strategy to rely more on domestic consumption. 

“We are also pursuing other U.S. interests with China. We are engaging on workers’ rights to ensure a level playing field for American workers, and pressing for China’s accession to the Government Procurement Agreement as well as a meaningful China contribution to the Doha Round. Other interactions also need attention. For example, in Africa, we should work cooperatively with China to ensure our respective actions support development. 

“In closing, I will simply reiterate the importance of getting our relationship with China right. Thank you for the opportunity to testify. I look forward to today’s discussion.”