August 9, 2006

Commerce chief to lead business trip to China

By Doug Palmer

WASHINGTON (Reuters) - With congressional anger over
China's exchange rate policy nearing a flash point, U.S.
Commerce Secretary Carlos Gutierrez said on Wednesday he would
lead a mission to boost exports to that country.

"It's important to note that our exports this year to
China, year-to-date to May, are up 37 percent," Gutierrez said
in an interview about his plans to lead a delegation of 20 to
30 U.S. companies to Beijing and Shanghai in November. "So, we
have momentum and we want to build on that."

U.S. exports to China have grown rapidly in recent years,
increasing 19 percent in 2005 to nearly $42 billion. But that
has been overshadowed by the huge volume of imports from China,
which totaled more than $243 billion last year.

There is good opportunity for U.S. manufacturers to expand
their exports in China and for companies in a number of
services sectors such as tourism, Gutierrez said.

Companies have until September 15 to apply for the November
13-17 trade mission, he said.

Many lawmakers blame the large U.S. trade gap with China on
Beijing's exchange rate policies, which they say keeps the yuan
undervalued by 15 to 40 percent against the dollar.

Sen. Charles Schumer, a New York Democrat, and Sen. Lindsey
Graham, a South Carolina Republican, are demanding the Senate
vote next month on their bill threatening China with a 27.5
percent tariff on its exports to the United States unless
Beijing raises the value of the yuan.

The Bush administration opposes the bill, but Gutierrez
refused to say whether he would recommend a veto if the Senate
and the House of Representatives were to pass the legislation.

Gutierrez also shed little light on where the Bush
administration stands on a potential trade case against China
for failing to enforce copyright and patent laws.

Widespread piracy and counterfeiting of American products
in China is a sore spot in Congress and many lawmakers want the
United States to file a case at the World Trade Organization.

The Chinese have made progress on the issue in recent
months and clearly understand they must do a better job of
protecting intellectual property rights, Gutierrez said.

"(But) if there is the need, one of the tools at our
disposal ... is a WTO case and we're not going to discard that
one day we would use that," he said.