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U.S.-China Economic and Security Review Commission, "Hearing: China’s WTO Compliance and Industrial Subsidies," April 4, 2006

This hearing was conducted by the U.S.-China Economic and Security Review Commission on April 4, 2006. The U.S.-China Economic and Security Review Commission was created by the U.S. Congress in 2000 to monitor, investigate, and submit to Congress an annual report on the national security implications of the economic relationship between the United States and the People’s Republic of China.
April 4, 2006

April 4, 2006
Room 2325 Rayburn House Office Building
Independence Ave. & South Capitol Street, SW

Cochairs: Commissioners Michael Wessel and Peter Brookes

Opening Statement of Carolyn Bartholomew, Vice-Chairman

Today’s topic, China’s WTO compliance, is one this Commission has followed since its establishment. Our annual hearings on the topic investigate the affect of any WTO non-compliance issues on the United States and the monitoring and enforcement tools available to the United States in the event that China is WTO non-compliant.

When Congress agreed to grant permanent normal trade relations to China, it did so with an air of caution. Congress established this Commission in order to examine the implications to the U.S. of its new trade relationship with China. The Administration has begun now to call for action from China in important areas where it continues to fail to comply with its WTO obligations. But many in Congress, for years, have called for greater action from China in the areas of concern where it has created an unfair disadvantage for U.S. industry – areas such as a lack of labor rights, blatant disregard for intellectual property rights, and currency manipulation.

What I hope to draw from panelists today is a sense of how Congress can best influence the development of future U.S.-China trade policy. There are several pieces of legislation currently proposed in both the House and the Senate to deal with current problems in the U.S.-China trade relationship. I hope that the Executive Branch understands the concerns of the people represented in this legislation and continues to demand greater accountability from China. Using our leverage to obtain results from China that benefit U.S. economic and national security is essential to maintaining a workable relationship with between the two countries.

I look forward to today’s hearing and I will now turn the microphone over to our hearing co-chair, Commissioner Peter Brookes.

Opening Statement of Larry M. Wortzel, Chairman

Good morning. Welcome to the U.S.-China Economic and Security Review Commission’s hearing on China’s WTO Compliance and Industrial Subsidies. The Administration has repeated over the last several months the importance of China taking responsible actions as a member of the in ternational community. China’s compliance with its WTO accession agreement is a major indicator of its ability and willingness to be a stakeholder in the international trading system.

This hearing continues the Commission’s earlier examination of China’s capacity to fulfill its WTO obligations. China has made progress in implementing the measures to which it agreed in joining the WTO. However, it has failed to protect intellectual property rights (IPR) and it continues to maintain a system of government subsidies and preferential treatment for domestic industries.

Today, the Commission will focus on examining the form and function of the Chinese government’s subsidies regime and preferential treatment for its domestic industries. The cochairs for today’s hearing are Commissioner Peter Brookes and Commissioner Michael Wessel.

Opening Statement of Vice Chairman Carolyn Bartholomew
Opening Statement of Chairman Larry M. Wortzel
Opening Statement of Commissioner Michael Wessel
Opening Statement of Commissioner Peter Brookes

Panel I: Congressional Perspectives on China’s WTO Compliance and Use of Subsidies
Congressional Members Invited

Panel II: Administration Perspectives on China’s WTO Compliance and Use of Subsidies
Mr. Timothy Stratford, Assistant U.S. Trade Representative, Washington, DC

Panel III: China’s WTO Accession Agreement and U.S. Law
Mr. Loren Yager, Director, International Trade, Government Accountability Office, Washington, DC

Panel IV: Chinese Economic Planning and the Role of Subsidies
Dr. Usha C. V. Haley, Associate Professor, University of New Haven, West Haven, CT
Dr. Gregory Chow, Professor of Economics, Emeritus, Princeton University, Princeton, NJ

Panel V: Currency Manipulation as an Industrial Subsidy
Dr. C. Fred Bergsten, Director, Institute for International Economics, Washington, DC
Mr. David Hartquist, Member, Collier Shannon Scott PLLC, Washington, DC
Mr. Robert Baugh, Executive Director, Industrial Union Council, AFL-CIO, Washington, DC

Panel VI: Impact of Chinese Industrial Subsidies on U.S. Industries
Mr. Alan Price, Partner, Wiley Rein & Fielding LLP, Washington, DC
Mr. John Magnus, President - TradeWins, LLC, Washington, DC



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