South-Western College Publishing - Economics  
U.S. Complains About China Trade
Topic International Trade
Key Words International Trade, World Trade Organization, and Protectionism
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Reference ID: A161825466

News Story While publicly recognizing that China's trade leadership has taken steps to improve trade relations with the U.S. no agreement has been reached on several important issues. As a result, the Bush administration has filed two official complaints with the World Trade Organization over Chinese trade practices.

The WTO deals with the rules of trade between nations such as the U.S. and China when there is a dispute about trade and the rules governing trade. The organization is responsible for negotiating and implementing new trade agreements, and is in charge of policing member countries' adherence to all the WTO agreements.

The first complaint relates to deficiencies in China's legal regime for protecting and enforcing copyrights and trademarks on a wide range of products. The second is over China's continued enforcement of barriers to trade in books, music, videos and movies.

The U.S. claims that the Chinese actions are inconsistent with China's obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), to discriminate against U.S. rights holders, to cause significant harm to intellectual property rights owners, and to impede trade between China and other WTO Members.

As long as the huge trade deficit between the U. S. and China persists Congress is likely to continue to call for trade reform. In fact, last month protectionist action was taken against China when tariffs were placed on Chinese imports of coated-paper products. This measure was taken because the government subsidized the Chinese paper industry making American producers unable to compete.

After years of negotiating with China directly the U.S. has decided to ask the W.T.O. to consider the complaints as a part of their duty to function as a forum for negotiations and for settling of disputes

Questions
Discussion Questions:
1. Explain how a tariff on Chinese coated-paper products makes American producers more competitive in the domestic market.
2. Visit http://en.wikipedia.org/wiki/World_Trade_Organization#Functions and name the two most important functions of the World Trade Organization. .
Multiple Choice/True False Questions:
1. The World Trade Organization provides a forum for negotiations and for settling of disputes between trading partners.
  1. True
  2. False
2. The U. S. placed a tariff on coated-paper goods to make American goods more competitive in the Chinese market.
  1. True
  2. False
Source Keith Bradsher, "China Conveys 'Regret" Over Trade Complaints," The New York Times Online, April 11, 2007.
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