Stronger U.S. action needed on China trade: panel

WASHINGTON (Reuters) - The United States needs to take stronger action to ensure China lives up to its trade obligations, the leaders of a U.S. commission that advises Congress told reporters.


"Let's face it, at a certain point, you need action," said Larry Wortzel, chairman of the U.S.-China Economic and Security Review Commission, which was set up by Congress five years ago and has a hard-line reputation.


China's failure to stop piracy and counterfeiting of U.S. goods and its manipulation of its currency are two examples of how it is shirking the rules it agreed to follow when it joined the World Trade Organization five years ago, Wortzel said on Wednesday during a briefing on the panel's annual report, which was formally released on Thursday.


"It makes agreements after very difficult negotiations, then it ignores them and goes off and does exactly what it wishes to do," Wortzel said.


The United States is partly to blame because it has been far too tolerant of China's failure to play by the rules, Commission Vice Chairman Carolyn Bartholomew said.


"The fact that for many years the Chinese government has gotten away with making promises and not having to abide by them has created a climate where they don't have to take the promises seriously," Bartholomew said.


Reuters obtained an advance copy of the commission's report two weeks ago and reported its main elements.


Those include recommendations that Congress increase pressure on the Bush administration to file cases against China at the World Trade Organization for manipulating its currency and failing to stop piracy and counterfeiting.


The two commissioners said they had been briefing congressional leaders and key committees on their report and expected trade relations with China to be a major issue next year and leading up to the 2008 U.S. elections.


Bartholomew is a former chief of staff to Rep. Nancy Pelosi, a California Democrat who is expected to become the first female speaker of the House next year as a result of Democratic victories in U.S. elections last week.


As Beijing approaches the fifth anniversary in December of its entry into the WTO, the U.S. trade deficit with China is on track to exceed $200 billion again this year.


Both Wortzel and Bartholomew said that was evidence that the United States had not benefited as much as supporters claimed it would when China joined the world trade body.