WASHINGTON (AFP) - China's weak enforcement of copyright rules and lack of transparency and market access in key services sectors topped concerns of American businesses, the US Chamber of Commerce said in a report on Beijing's WTO pledges.
It also highlighted significant concerns over the role of state intervention in designated strategic sectors of China's economy nearly three years after the world's most populous nation joined the World Trade Organization (WTO).
Even though the US political environment is focused on the massive trade deficit with China, rising competition from its imports and concerns about its currency regime as well as outsourcing of American jobs, the chamber said China's full implementation of its WTO commitments was a key issue.
"If China falters in meeting its commitments and adherence to WTO disciplines, such as in intellectual property and transparency, there will be political and commercial ramifications that will constrain the full potential of this relationship to the detriment of both countries," it said.
The chamber, representing more than three million businesses, said it wanted "immediate and demonstrable evidence" from Chinese authorities that the intellectual property rights (IPR) climate in China was improving.
Short of that evidence emerging quickly, it said, the American business community would be justified in working with the US government to explore other courses of action to address China's failure to comply with its IPR commitments under its WTO obligations.
"It is premature for us to announce today that we would take a 301 action or to support one by our government but it is not premature for us to say that time is ticking away," Myron Brilliant, the chamber's vice-president for East Asia, told reporters as the report was released.
Section 301 of American trade law empowers a US President to place sanctions on imports from countries that place unfair trade actions against US exports.
Brilliant said China remained committed to its WTO promises and that there was progress towards providing US business with new market opportunities.
"But clearly China needs to do more to protect intellectual property rights and we are urging Chinese authorities to take action in this area this year," he said.
Foreign companies and governments are becoming increasingly frustrated with the continuing problems of piracy and counterfeiting in China, which leads to billions of dollars of losses each year.
The US estimates the value of counterfeit goods in China at 19 billion to 24 billion dollars annually.
Beyond highlighting intellectual property protections, the chamber's report cited ongoing concerns over inadequate transparency and the overall inconsistency of China's WTO rules implementation efforts.
The report noted that China needed to ensure that it fully opened its markets in "such critical areas as agriculture, automotive, construction and engineering, express delivery, insurance and telecommunications."
Ray Sander, the chamber's Asia task force co-chair, said government ministries and agencies in Beijing should emulate the Chinese ministry of commerce in terms of greater transparency.
The report called for "greater clarity" on China's record on standards and granting trading rights and distribution services to foreign companies and noted concerns about continued confusion in the regulatory environment for foreign companies.
The United States ranks second among China's global trading partners in 2003 and China moved up to third place among US trading partners.
US exports to China have grown 75 percent in three years and rose 29 percent US-in 2003 alone, the chamber said.