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Updated Wednesday, December 14, 2011 0:37 am TWN, By Doug Palmer, Reuters

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USTR faults China WTO record in annual report

WASHINGTON--Ten years after joining the World Trade Organization, China still does not fully embrace many fundamental free market principles of the global trade body, the U.S. Trade Representative's (USTR) office said on Monday in an annual report to Congress.

“In 2011, the prevalence of interventionist policies and practices, coupled with the large role of state-owned enterprises in China's economy, continued to generate significant concerns among U.S. stakeholders,” the USTR said.

“Looking ahead, essential work for China includes the need to reduce market access barriers, uniformly follow the fundamental principles of non-discrimination and transparency, fully embrace the rule of law, and fully institutionalize market mechanisms,” the report said.

“Completing this work is critical to realizing the tremendous potential presented by China's WTO membership, including the breadth and depth of trade and investment — and prosperity — possible in a thriving, balanced global trading system.”

A deal struck by former USTR Charlene Barshefsky in 1999 set the stage for Congress to approve “permanent normal trade relations” (PNTR) with China the following year and then for China to enter the WTO on Dec. 11, 2001.

Its bid to join the world trade body took 15 years, surpassed only recently by Russia, whose entry is expected to be approved this week in Geneva after some 18 years of talks.

Many members of the U.S. Congress remain skeptical over the benefits of China's accession. They blame the huge U.S. trade deficit with China, which hit a record US$272 billion last year, for millions of lost U.S. manufacturing jobs.

A congressional and executive branch watchdog commission created by the 2000 PNTR legislation will hold a hearing on Tuesday to ask Assistant U.S. Trade Representative for China Claire Reade, and other witnesses the following question: “Ten years in the WTO: Has China kept its promises?”

USTR, in its report, noted that China made many changes to its laws and regulations during the first five years of its membership in the WTO. But starting in 2006, Chinese leaders started to back away from the types of market reforms that led to China's admission.

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