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US considering tariffs for China foods

01-Apr-2004

To counteract China's alleged abuse of patent protection the US government is proposing legislation that would mean greater tariffs on a variety of Chinese products including food and beverage items.

The US government is trying to introduce a bill to the senate and have it passed this year. The measure would hit a variety of sectors, from agricultural producers, to processed food manufacturers.

The legislation aims to draw attention to claims that China is continuing to flout patent rights in a variety of areas, particularly those of the music and film industry and software producers. The push to pass the legislation also comes in advance of a state visit by Chinese vice premier Wu Yi on April 18, during which talks are mooted to discuss the issue of patent protection, particularly in view of China's commitments to the World Trade Organization.

 

Trade between China and the US, the world's two largest economies, has been growing at a rapid rate in recent years. However, as Chinese manufacturing costs remain extremely competitive against US costs, the trade deficit between the two countries is also growing. Last year the US had a $124 billion trade deficit with China, a gap that is continuing to worry US economists and the government.

 

The US says that the trade deficit is just one of the reasons why the country has lost 2.9 million jobs in manufacturing since 2001 - a problem which is said to have been exacerbated by the illegal manufacturing of electronic, music and film products. Indeed, so great is the problem that one US software industry head believes that as much as 97 per cent of all computer games produced in China are pirated.

 

Lobbyists representing movie producers, music companies and software makers have informed the Senate that weak Chinese copyright and patent protection is undermining their profitability.

 

To counter attack this situation the new US legislation will propose that the US levy 'countervailing duties' against China, however industry observers believe that such a move may be reconsidered if talks with the Chinese deputy premier prove to be fruitful.

 

News of the latest trade tariff proposals could further harm already strained trading relations between the two countries. At the end of last year, the US government announced that all Chinese food exports to the US would have to register with the USFDA in an effort to meet requirement aimed at defending the US against the threat of bioterrorism. However many Chinese food traders said they saw the move as a trade barrier due to the fact that it increased bureaucracy, limited free flow of exports and increased their costs.

 

In 2002, China exported $1.63 billion worth of agricultural products to the US, making it the fourth largest trade partner for this sector.

 

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