Talks with China Bring Progress on Trade Issues
Opportunities were opened for U.S. exporters in key industries and several agreements were signed during the 18th meeting of the U.S.–China Joint Commission on Commerce and Trade in Beijing on December 11, 2007.
by Rebecca Karnak
Senior U.S. and Chinese trade officials agreed this past December on steps to increase market access in China, to improve product safety, to ensure an open investment environment, and to create other opportunities for U.S. businesses. At the one-day meeting of the 18th U.S.–China Joint Commission on Commerce and Trade (JCCT) in Beijing, Secretary of Commerce Carlos M. Gutierrez noted, “ We can use this 18th JCCT … to give the world confidence that we are both committed to openness … and that we can give the world confidence that openness works. That openness creates jobs. That openness creates prosperity.”
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|Several agreements that will help U.S. exports to China were signed at the December 11, 2007, meeting of the U.S.–China Joint Commission on Commerce and Trade in Beijing. Carlos M. Gutierrez, secretary of commerce (left); Wu Yi, Chinese vice premier (center); and Shao Qiwei, chairman of the China National Tourism Administration (right), participated in the signing of the agreement covering tourism. See related story. (U.S. Department of Commerce photo)
The U.S. delegation to the JCCT was cochaired by Gutierrez and U.S. Trade Representative Susan C. Schwab. Chinese Vice Premier Wu Yi led the Chinese delegation. The U.S. Department of Agriculture also participated in the meeting.
Increasing Market Access
One important outcome of the JCCT meeting was China’s agreement to take tangible steps that will increase market access for U.S. suppliers and will improve the overall climate for U.S. companies doing business in China. Those steps include the following:
• Addressing loopholes in its regulation of bulk chemicals, which can be used as active pharmaceutical ingredients and are sometimes found to be the underlying source of many counterfeit drugs
• Eliminating any remaining redundancies in China’s testing and certification requirements for imported medical devices and suspending a regulation that would have created additional testing and inspection redundancies for imported medical devices
• Opening the door for Chinese group leisure travel to the United States, which will ensure that U.S. companies can work with Chinese travel agencies to market tours and that U.S. destinations can market themselves freely in China and attract Chinese tourists
• Strengthening the enforcement of laws against company name misuse, which occurs when some Chinese companies register legitimate U.S. trademarks and trade names without legal authority to do so
• Improving conditions so that certain U.S. agricultural products can be sold in China
Improving Product Safety
The United States and China concluded two memoranda of agreement to secure the safety of certain medical devices, pharmaceuticals, food products, and animal feed exported from China to the United States. Those agreements will expand technical assistance and coordination between the two governments on safety issues for certain products.
Ensuring an Open and Non-discriminatory Investment Regime
During the JCCT meeting, China gave a strong statement that reiterated its commitment to open investment and competition policies and to the principle of non-discrimination in investment regulation. The two sides agreed to undertake investment-related discussions that will address specific U.S. concerns about China’s implementation of its antimonopoly law and its regulations regarding mergers and acquisitions.
Creating Opportunities for U.S. Businesses
U.S. industry will also benefit from several other agreements that were signed during the JCCT meeting. One was a memorandum of understanding to increase Chinese tourist travel to the United States and to facilitate the marketing in China of U.S. travel destinations (see sidebar).
Another was a memorandum of understanding to deepen a partnership first established in 2005 between the Commerce Department and the China Council for the Promotion of International Trade. The agreement allows U.S. exports to enter 14 “second-tier” cities in China. Those cities, similar to the larger urban centers, are home to China’s burgeoning middle class.
A third agreement was signed that established guidelines for U.S.–China high-technology and strategic trade development. The guidelines outline the importance of working cooperatively to achieve the mutual benefits of promoting safe and secure civilian U.S. high-technology exports to China.
In addition to those agreements, the two countries also signed a memorandum of cooperation to launch the Environmental Industries Forum. The forum will facilitate U.S. trade to China’s environmental industries market, which, since 2000, has grown 235 percent, to $19 billion.
Innovation, Intellectual Property Rights Issues Highlighted
Before the JCCT meeting, Gutierrez gave the keynote address at the China–U.S. Innovation Conference on December 10 in Beijing. In his speech, he stressed the importance of intellectual property rights and transparency in creating an environment for innovation to flourish. (See related story.) He also delivered a similar message at the third Strategic Economic Dialogue, which was held in Beijing on December 12–13.
Rebecca Karnak is an international trade specialist in the Market Access and Compliance unit of the International Trade Administration.
For More Information
Started in 1983, the JCCT is a high-level government-to-government dialogue that seeks to address market access issues and to provide a forum to discuss trade and investment matters.
A fact sheet on the outcomes of the December meeting, along with transcripts of remarks by the secretary of commerce, are available on the Web site of the Department of Commerce.
U.S. Tourism Industry to Benefit from New Agreement
The U.S. travel and tourism industry will be the beneficiary of a memorandum of understanding signed by the United States and China on December 11, 2007, during the most recent meeting of the U.S.–China Joint Commission on Commerce and Trade (JCCT).
The new agreement will facilitate group leisure travel from China to the United States by allowing companies to work with Chinese travel agencies to organize and market tours for leisure purposes. The agreement also facilitates U.S. destinations’ marketing activities in China. Secretary of Commerce Carlos M. Gutierrez signed the agreement during his visit to Beijing to cochair the U.S. delegation to the JCCT. It is expected to take effect in spring 2008.
The agreement will not change current visa policies. Under its terms, Chinese visitors will enter the United States under the State Department’s existing visa procedures. The agreement may be terminated if a significant number of travelers overstay their period of admission.
International travel and tourism constitutes a significant export industry for the United States. According to the Department of Commerce’s Office of Travel and Tourism Industries, travel and tourism receipts accounted for 26 percent of all services exports in 2006, posting a trade surplus of $8.3 billion and supporting 900,000 U.S. jobs.
According to the World Tourism Organization, China’s travel market is the fastest growing in the world. The Department of Commerce forecasts that the number of Chinese travelers to the United States will grow from 320,000 in 2006 to 579,000 by 2011. This growth will increase tourism-related exports by U.S. companies. On average, Chinese citizens spend more while in the United States than visitors from other countries. In 2006, the average amount spent by Chinese visitors was more than $6,000 per person, including travel, lodging, meals, and incidental expenses.
For more information on the U.S. travel and tourism industry, including a fact sheet on the memorandum of understanding, visit the Web site of the Department of Commerce’s Office of Travel and Tourism Industries.