Oral Testimony By Deputy United States Trade Representative Demetrios J. Marantis Before The House Committee On Ways And Means

WASHINGTON — October 25, 2011 — “Chairman Camp, Ranking Member Levin, members of the committee,
thank you for the opportunity to testify.

“Since China joined the World Trade Organization in 2001, U.S. goods exports, including
semiconductors, aircraft, and chemicals, have quadrupled.  Agriculture exports are up 800
percent led by soybeans and cotton.  Services exports are up nearly 300 percent on growing
sales of business, education, and financial services.  And American job-creating investment in
China has grown 400 percent.

“America’s trade relationship with China has tangible benefits.  But just as real are
the persistent concerns that threaten to undermine the potential of this relationship.
“Intellectual property theft in China costs U.S. companies $48 billion every year.  China’s
industrial polices, like ‘indigenous innovation,’ discriminate against U.S. products, services,
innovators, and investors.  China’s subsidies raise deep concerns and can lead to unfairly
traded imports that affect our trade deficit.  Investment restrictions limit the ability of
U.S. companies to compete effectively in China and to create jobs here at home.  Unfair
barriers to U.S. agricultural imports hurt our beef, poultry, and pork producers.  Weak
enforcement and lack of transparency undermine U.S. exporters and investors.

“President Obama is determined to make our relationship with China work better for working
Americans — to tap its potential to support American jobs and grow our economy.  This
Administration’s coordinated approach is focused on various enforcement, results-oriented dialogue,
and strengthening global trade rules.  

“First, enforcement.  In the WTO, the Obama Administration has initiated five strategic
and systemic disputes against China.  We challenged China’s export restraints on industrial
raw materials, in a case unprecedented in size and importance.  For the first time since China
joined the WTO, we accepted a Section 301 petition, which brought China to the WTO to answer for
prohibited wind power equipment subsidies.  We have challenged China’s regulation of
electronic payment services to address the apparent creation of a home-grown monopoly that blocks
competition.  We brought two WTO cases to address the apparent misuse of trade remedy
investigations to restrict U.S. exports to China.  And for the first time ever, we imposed
duties to combat a surge of Chinese tire imports pursuant to Section 421.  The Obama
Administration will not hesitate to bring additional enforcement cases when appropriate.

“Litigation alone is not enough.  Results-oriented dialogues like the Joint Commission
on Commerce and Trade (JCCT) and the Strategic and Economic Dialogue also yield swift and lasting
benefits.  Last year, our engagement led to new measures to increase legal software use in
China.  We also obtained China’s agreement not to discriminate against foreign intellectual
property in its procurement policies, and to address agriculture concerns by eliminating unfair
bans on our poultry exports, and some key restrictions on our pork. 

“For this year’s JCCT, USTR continues to work intensively — together with the Commerce
Department — to secure results focusing on IPR, indigenous innovation, investment restraints,
industrial policies, and other issues.  

“Aside from this structured dialogue, we are also engaging China directly on its adherence to
trade rules regionally and globally.  This month, for the first time, the United States
submitted in the WTO a subsidy counter-notification to call China out on over 200 subsidies that it
had not notified as required.  Similarly, we have called on China to share detailed
information on measures that limit the supply of services over the internet and hinder the ability
of our companies to effectively compete.  Outside the WTO, we are working to strengthen trade
rules across the global trading system through efforts including the Trans-Pacific Partnership and
the Anti-Counterfeiting Trade Agreement.  

“The Obama Administration is working hard so that the United States can compete with China on
a level playing field, and American businesses and workers can prosper.  Progress will occur
if we recognize the value of this relationship and address the challenges of the work ahead.”

Posted on October 25, 2011

Source: USTR