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U.S. wants China to "take thumb off" trade scale

By Doug Palmer

WASHINGTON (Reuters) - Trade Representative Ron Kirk on Wednesday urged China to end policies that discriminate against U.S. companies and brushed off "ridiculous claims" that the United States is protectionist.

"All we're asking China to do is play by the rules, get your thumb off the scales, let us go in and compete equally," Kirk said at the Global Services Summit, which brought together industry groups and trade officials from around the world.

That message also applies to the European Union, Russia and Canada or any country that has unfairly taken steps to restrict U.S. exports, Kirk told the group.

The tough message came one day before President Barack Obama is set to meet with Chinese Premier Wen Jiabao on the sidelines of an annual U.N. meeting in New York, and follows the U.S. decision last week to file two new trade cases against China at the World Trade Organization.

In early November, Kirk and U.S. Commerce Secretary Gary Locke will host top Chinese officials for the annual U.S.-China Joint Commission on Commerce and Trade, a forum designed to tackle trade irritants.

Meanwhile, Democratic leaders in the U.S. House of Representatives are mulling a bill aimed at pressuring China to revalue its currency, although the days are dwindling for action before lawmakers return home to campaign for the November 2 congressional elections.

Kirk did not address the currency issue in his speech. But many U.S. lawmakers believe China deliberately undervalues its currency by as much as 25 percent to 40 percent to give its exporters an unfair advantage in trade.

Asked about a new U.S. trade case against barriers to China's electronic payments market, Kirk said a core element of the Obama administration's trade policy is an insistence that other countries "behave the way they said they would" in trade deals they have signed with the United States.

"We want government to get its thumb off the scales, we want state-owned enterprises to get out of the business and just let us compete," Kirk said.

Kirk also defended the United States' use of anti-dumping duties and other measures to keep out goods it thinks are unfairly traded or that have come into the U.S. market in such quantities as to hurt U.S. producers.

"Nothing burns me more than the claims that every time the United States stands up and fights for the rights of small businesses, manufacturers, farmers and ranchers, we have these ridiculous claims of protectionism hurled at us," Kirk said.

"If the only way I can prove my fidelity to trade is for the United States to roll over and lose every battle, that ain't going to happen," he added.

(Reporting by Doug Palmer; Editing by Xavier Briand)