China - China says U.S. APEC goals too ambitious

U.S. goals of establishing regional free trade and an environmental policy at the APEC summit are useful but too ambitious for some developing nations, China said on Monday, days before President Hu Jintao heads to Hawaii for the meeting.

APEC (Asia-Pacific Economic Cooperation) members from 20 countries have taken a "fundamentally supportive attitude" of the U.S. proposals for green growth and innovation to be raised at the leaders' meeting in Honolulu from November 12-13, Assistant Foreign Minister Wu Hailong said.

"But expectations for outcomes are too high and beyond the reach of members from developing countries," Wu told reporters during a joint briefing with China's Commerce Ministry.

Sorely lacking jobs at home and looking for ways to cement the U.S. presence in Asia, the Obama administration wants to drive forward the TransPacific Partnership (TPP) free trade pact among nine nations on the sidelines of APEC.

The United States eventually hopes to expand the deal from the current nine countries -- the United States, Chile, New Zealand, Singapore, Australia, Vietnam, Peru, Malaysia and Brunei -- to all 21 members of APEC, which account for about 54 percent of the world's economic output and 44 percent of global trade.

Part of the initiative would be strong language that ensures state-owned enterprises (SOEs) do not benefit from government subsidies not available to privately owned firms.

The SOE issue is likely to discourage the participation of China, the world's second biggest economy, where many critical industries are controlled by state-backed firms.

"We haven't participated in the talks, so we cannot comment. The threshold is high. Whether a standard can be achieved, we'll just have to wait and see," Assistant Minister of Commerce Yu Jianhua said when asked about the U.S. goals for SOEs in the deal.

But whether or not China ever joins what Washington bills as a "21st century" trade agreement, a top U.S. State Department official said on Monday he thought the pact would help shape Beijing's behavior in the trade arena.

"If we have high enough principles and practices in it, it will give a signal to China that other countries are playing by a higher set of international rules," U.S. Undersecretary of State Robert Hormats told the Reuters Washington Summit.

China has said it supports free trade in the Asia-Pacific and will watch progress on the TPP, which some analysts think Japan could ask to join at this week's APEC meeting.

But experts say Beijing prefers other regional frameworks that would not force it to open its markets at the behest of the United States.

Those deals might include a Japan-China-South Korea deal, as well as the 10+1, 10+3, 10+6 frameworks -- talks between the 10 members of the Association of Southeast Asian Nations (ASEAN) and other Asia-Pacific countries.

"China is in a much better bargaining position when they don't have the United States sitting at the same table," Scott Kennedy, the director of the Research Center for Chinese Politics and Business at Indiana University, told Reuters.

GREEN GROWTH

Hu is set to meet with U.S. President Barack Obama at the summit, as well as the presidents and prime ministers from Japan, Canada, Peru and Vietnam.

The United States hopes to persuade China and other APEC countries to agree on a deal to lower tariffs on environmental goods, such as wind turbines and solar panels, to 5 percent.

Assistant Commerce Minister Yu said of the list of 153 green products proposed by the United States, average U.S. tariffs are 1.4 percent compared to China's nearly 7 percent.

"The problem is, if we set a goal of 5 percent, the U.S. doesn't need to do anything. We are the ones that need to do all the work," he said.

"Some economies on one hand promote free trade of green products and services and at the same time abuse trade remedies and protectionism on trade of green products within the APEC region," Yu said.

The U.S. arm of Germany's SolarWorld has asked a the Obama administration to impose duties of more than 100 percent on Chinese solar imports, which they said were unfairly undercutting U.S. prices and destroying American jobs.

The U.S. Commerce Department is due to decide by November 9 on whether to launch an investigation on the case, which could add to friction before the summit.

Reuters

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