USTR Soft on China, Hard on EU

April 3, 2000

The U.S. trade representative has released the 2000 inventory of trade barriers and takes a soft approach to China, noting China’s elimination of trade barriers, but comes down hard on the European Union, blasting the EU’s biotech approval process as "unnecessarily lengthy and arbitrary," stopping hundreds of millions of dollars in U.S. farm product imports.

For China, USTR reviewed the"unprecedented" November bilateral agreement with China on the terms of its accession to the World Trade Organization. "This agreement contains comprehensive, one-way concession on the part of China," USTR said.

"The commitments China will undertake will provide access for industrial and agricultural products and the full range of services trade, including telecommunication, insurance, banking and legal services," the report continues. "China will also eliminate virtually all restrictions on trading and distribution rights which have been persistent barriers to meaningful access."

For the EU, however, the tone and style was quite different. "The EU’s continued failure to implement a WTO-consistent banana regime and its failure to comply with the WTO rulings on beef treated with growth hormones not only have adversely affected U,S. exports but have undermined the credibility of the WTO dispute settlement system. Other trade problems stem from EU regulatory procedures which often lack adequate transparency, proper scientific justification and serve as protectionist measures."

BLOOMBERG NEWS quotes Peter Morici, a senior fellow at the Economic Strategy Institute, a Washington think tank, saying the United States lightened its criticism of China to boost its lobbying efforts. "They’re clearly putting a spin on it," Morici said. "The changes in the Chinese market have not been profound between 1999 and 2000. China continues to be a difficult to penetrate market and progress has yet to materialize."

USTR took something of a wait-and-see attitude toward South Korea. "While President Kim Dae Jung has committed to a more open, market-oriented economic policy – and Korea has implemented some reforms, such as in the financial sector – many of its structural reforms have yet to be implemented."

"Some complacency" regarding the need for continuing economic reform was seen as Korea recovered from the financial crisis in 1999, the report says. "This is of serious concern to the U.S. government as are the many issues that have arisen with respect to Korea’s international obligations."

The report notes that the United States brought a WTO dispute settlement action against Korea’s beef import and distribution regime and expressed concerns about Korean policy on other agricultural products, including citrus, rice and potato preparations.

A copy of the report is available on the Internet at http://www.ustr.gov under "reports." Bound copies will be available form USTR on Wednesday.