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U.S., China should set goals for trade: U.S. lawmakers

By Doug Palmer

WASHINGTON (Reuters) - U.S. lawmakers urged top Obama administration officials to press for commitments from China next week that would set targets for imports of U.S. software and other goods.

The pressure came as new trade data showed the U.S. trade deficit with China could surpass the record of $268 billion set in 2008, and as top Chinese officials were due in Washington on Tuesday and Wednesday for the annual U.S.-China Joint Commission on Commerce and Trade.

The bipartisan group of 33 members of the House of Representatives, in a letter released on Friday, complained that Beijing's past promises at the JCCT "have failed to lead to commercially meaningful market access for U.S. companies."

"We write to urge you to press China for meaningful objective commitments and metrics to increase U.S. market access in China and protect intellectual property rights," the lawmakers said.

It was written to U.S. Commerce Secretary Gary Locke and U.S. Trade Representative Ron Kirk, who will co-chair the high-level talks next week with the Chinese.

Commerce Department figures released on Friday showed the U.S. trade deficit with China for the first 10 months of 2010 totaled $226.8 billion, a 20 percent increase from the same period last year. At that pace, the bilateral trade gap would total about $272 billion for the entire year.

The lawmakers were led by Representatives Dave Camp and Sander Levin, the incoming Republican and outgoing Democratic chairman of the House Ways and Means Committee.

To achieve better results in the talks next week in Washington, "we urge the administration to measure progress on greater U.S. market access into China and protection of U.S. intellectual property rights by objective criteria," the lawmakers said.


"These criteria should include commercially meaningful metrics, such as increased U.S. exports to and sales in China that increase U.S. jobs, a significant decrease in the theft of intellectual property rights caused by infringing products sold in and exported from China, and an objective means to verify such results," they said.

They called for "robust commitments" for U.S. industries such as software, entertainment and technology, which they said have been "harmed by the continued massive theft of their intellectual property and onerous and discriminatory market access restrictions in China."

The lawmakers took aim at other Chinese trade practices, including its restraints on exports of rare earth minerals, which they said "frustrate the operations of many U.S. companies."

U.S. trade officials, at a background briefing for reporters, offered few details of what new commitments to expect from next week's talks.

They said they have been working with China to encourage greater use of legal software, but declined to say whether they were pressing for specific sales targets as advocated by the Business Software Alliance.

BSA, which represents Microsoft and other U.S. software manufacturers, wants China to commit to increasing purchases of licensed U.S. software by at least 50 percent over two years. It also wants a system in place to verify that China's commitments have been met.

The U.S. trade officials said a big focus of next week's meeting would be China's "indigenous innovation" policies which threaten to force foreign companies to transfer intellectual property to China to participate in the country's vast government procurement sector.

China's barriers to U.S. beef and other agriculture exports will also be on the agenda, the U.S. officials said.

China's export restrictions on rare earth minerals is "a very important issue," one of the trade officials said. "It's something we need to look very carefully at."

A second U.S. official noted the United States has challenged other Chinese export restraints as a violation of commitments Beijing made to the World Trade Organization.

(Reporting by Doug Palmer; Editing by Vicki Allen)