U.S. impatient for results from China trade talks

The Bush administration pushed for concrete results in high-level trade talks with China that began Tuesday, but the head of the Chinese delegation bluntly warned against confrontation.

Treasury Secretary Henry M. Paulson Jr. said it was important that the two days of talks produce results to build trust between the countries. He said Americans were by nature impatient, and he said the two sides should work to build a “road map to the future.”

The administration is eager for success stories to show an increasingly restive Congress, where lawmakers blame America’s soaring trade deficits and the loss of manufacturing jobs in part on China’s trade practices in such areas as currency evaluation and copyright piracy.

The U.S. delegation also raised the issue of food safety in response to the deaths of pets that had eaten pet food made with tainted wheat gluten from China.

U.S. Trade Representative Susan C. Schwab said food safety was raised by Agriculture Secretary Mike Johanns and Health and Human Services Secretary Mike Leavitt.

“They know this is an issue that concerns us and concerns the American people,” said Commerce Secretary Carlos M. Gutierrez, who said the issue would be addressed more formally in a later session before the talks conclude today.

In opening remarks, Chinese Vice Premier Wu Yi cautioned the United States against pursuing a blame game.

“We should not easily blame the other side for our own domestic problems,” Wu said, speaking through an interpreter. “Confrontation does no good at all to problem solving.”

Wu, who gained a reputation for tough speaking when she was China’s top trade negotiator, said both sides should “firmly oppose trade protectionism.” She said any effort to politicize the economic relationship between the nations would be “absolutely unacceptable.”

Wu and her delegation also were to meet behind closed doors with key leaders of Congress, including House Speaker Nancy Pelosi (D-San Francisco), who has been a vocal critic of China’s human rights policies. Lawmakers are pushing a variety of bills that would impose economic sanctions on China after the U.S. trade deficit with China last year hit $232.5 billion, accounting for almost one-third of America’s total record deficit of $765.3 billion.

Paulson created the Strategic Economic Dialogue last fall as a way to get the country’s policymakers together twice a year to work on easing trade tensions. The first meeting was held in Beijing in December.

Breakthroughs at this meeting were expected in the area of cutting tariffs on sales of American energy technology products and services in China and increasing U.S. airline passenger and cargo flights to China.

However, success in another area -- getting China to boost the stake that American firms can own in Chinese financial service companies -- seemed less certain. The current cap on foreign ownership of Chinese banks is 25%.

U.S. officials tamped down expectations of any big outcomes, however, saying the meetings were not meant to be negotiating sessions.

But Gutierrez said there was impatience on the U.S. side. He spoke of the “need to make progress in all areas as soon as possible.”

Addressing the rising unease in Congress, Schwab said, “This is not necessarily reflective of more protectionism or anti-Chinese sentiment, but rather that there are concerns there and we need to be responsive.”

Sen. Edward M. Kennedy (D-Mass.) and four other senators urged the administration in a letter to get commitments from the Chinese for cooperation in investigations into food safety, saying that the way China handles the issue was unacceptable.

American manufacturers contend that China is manipulating its currency to keep it undervalued against the dollar by as much as 40%, making Chinese goods cheaper in the U.S. market and American products more expensive in China.

But there was no expectation of further progress in this area after China’s surprise announcement last week that it was slightly widening the range its currency could move against the dollar in a single day to 0.5% from 0.3%. Critics were unimpressed by the small widening of the currency band.

There were reports that China considered calling off this round of talks after the Bush administration, in an effort to preempt tougher actions in Congress, imposed penalty tariffs on Chinese paper products in a fight over government subsidies and filed cases against China before the World Trade Organization complaining about lax enforcement of copyright protections for American movies, music and other products.

China in recent days has made several moves to defuse American unhappiness. In addition to announcing the change in its currency band, China this month said it would purchase $4.3 billion in American high-technology products and in the last few days announced that it would invest $3 billion in Blackstone Group, the second-largest U.S. private equity firm.