Chinese Paper Sanctions May Lead To Cases In Other Industries

The sanctions were the result of a complaint by a U.S. paper manufacturer; while no new cases are pending, it remains a possibility in other industries.

BEIJING (AP) - U.S. sanctions recently imposed on Chinese paper imports could lead to similar steps in other industries, although there were no new cases pending, a U.S. trade official said Wednesday.

''I don't want to downplay the significance of our decision two weeks ago. It opens up, it may lead to future cases, but we're not considering any other sectors at this time,'' David Spooner, assistant secretary of commerce for import administration, told reporters at the end of two days of talks with Chinese officials here.

In response to a complaint from a U.S. paper manufacturer that Chinese companies were receiving improper subsidies from Beijing, the U.S. Commerce Department imposed penalty tariffs ranging from 10.9 percent to 20.4 percent on imports of glossy paper from China.

The move, announced March 30, reversed 23 years of U.S. trade policy by treating China, which is classified as a nonmarket economy, in the same way other U.S. trading partners are treated in disputes involving government subsidies.

Spooner said he met with China's top trade negotiator Gao Hucheng and other officials to explain the reasons for the sanctions.

''The economy of China in 2007 is not the Soviet bloc of the mid-1980s when we formulated our policy of not applying anti-subsidy law to nonmarket economies ... It would be divorced from reality if we said that there is an absence of market forces in China and that companies didn't respond to subsidies,'' he said.

Spooner characterized the discussions as ''positive, productive and constructive,'' though he said Beijing didn't ''wholly agree'' with the U.S. position.

The paper duties were the result of a case brought by NewPage Corp., a Dayton, Ohio-based paper company. It contended that its coated paper, used in printing glossy catalogues and annual reports, was facing unfair competition from Chinese imports.

The tariffs took effect in April on a preliminary basis and will become final after a further review in June.

The action was being closely watched by many other American companies, in industries ranging from steel to furniture, that have been battered in recent years as Chinese imports flooded into the country.

Senior officials from the countries are due to meet in May in Washington for the latest round of a ''strategic economic dialogue'' led by U.S. Treasury Secretary Henry Paulson and Chinese Vice Premier Wu Yi. The dialogue is meant to address issues ranging from market access to complaints about Chinese currency controls.

Chinese officials say they are taking steps to rein in the country's export surplus, which is widening steadily despite Beijing's declarations that it wants balanced trade. Washington is demanding that Beijing lower what it says are regulatory barriers that limit access to foreign competitors in its markets.


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