Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 5, 1995 TAG: 9502060072
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: The Washington Post
DATELINE: WASHINGTON LENGTH: Medium
Within an hour of the announcement, China responded with 100 percent tariffs on U.S.-made compact discs, cigarettes, alcoholic beverages and other products ``to protect its sovereignty and national dignity,'' China's official Xinhua News Agency said.
Each nation's tariffs, which would double the price of the targeted imports, are to take effect Feb. 26.
U.S. officials said they hope China will avert a trade war by acting before that date on the costly and contentious issue of the making and marketing of pirated products, including compact discs, personal computer software and movie videocassettes.
The United States wants China to shut factories that pirate U.S. products and agree on other steps to protect U.S. companies from losing sales to unauthorized versions of their products, U.S. trade officials said. But China's ability to reach an agreement with the United States may be complicated because aging leader Deng Xiaoping is ailing and perhaps close to death, leaving decision-making to others who may be more resistant.
``We're drawing the line right here today,'' Kantor said Saturday.
A senior official of China's trade ministry blamed the Clinton administration for the escalating trade tensions. ``The responsibility for such a situation does not lie with China,'' the Chinese news agency quoted the official as saying. ``It is unreasonable for the U.S. side to force China ... to accept demands which were not included in the bilateral and multilateral trade agreements.''
The U.S. sanctions, which have broad support among U.S. businesses, are a high-stakes move in a series of long - and so far not very productive - negotiations between U.S. and Chinese trade officials over protecting U.S. patents, copyrights and trademarks. In addition to provoking retaliation against U.S. exports to China, the sanctions also may hurt the chances of U.S. companies seeking to do business there.
But the losses from piracy are large, too, Kantor said. U.S. companies and workers have lost more than $1.08 billion in China, and even more in other nations where the pirated products are sold, he said.
Two major issues in the talks have been China's failure to enforce laws forbidding piracy - some factories producing pirated products are government enterprises - and its failure to open Chinese markets to legitimately produced U.S. products.
The sanctions are aimed at cutting off U.S. markets for some of China's fastest growing exports and cover 35 categories. But Kantor said that the sanctions were not expected to increase U.S. consumer prices because there are substitutes for the products involved that are produced in the United States or elsewhere.
The largest category of Chinese-made products selected for the U.S. tariffs covers plastic articles, such as picture frames and baseball card holders, which account for about $465 million in U.S. imports. Other items included in the sanctions are telephone answering machines, cellular phones, silk, sporting goods such as fishing rods and surf boards, bicycles and wooden articles such as jewelry boxes.
Trade between the United States and China, which has most-favored nation trading status with the United States, has been growing rapidly since the two countries normalized relations in 1979. Most of the growth has benefited China's trade balance, with its exports to the United States growing to almost $38 billion last year from $3.1 billion in 1979. U.S. exports to China, meanwhile, grew to $9 billion from $3 billion.
by CNB