The report described broad progress made to date by China in implementing reforms, but also highlighted the need for additional action in important areas such as intellectual property rights enforcement and the elimination of government policies that hinder market access for foreign trade partners.

“The United States and China have both benefited greatly from our growing trade relationship, and China’s participation in the rules-based international trading system has aided China greatly as it transforms itself into a modern commercial power. China has taken many important steps to implement its WTO obligations, but on the fifth anniversary of its WTO membership, China’s overall record is decidedly mixed,” announced Ambassador Schwab.

She continued:

“Chinese reforms have lowered systemic trade barriers to many goods and services from the United States and other WTO members and have begun to strengthen the rule of law in economic matters. At the same time, certain industries face frustrating barriers to doing business in China, and there are worrisome signs that China’s market liberalization efforts have slowed in the last year. With five years of WTO membership experience under its belt, we believe it is fair to expect China to be implementing the letter and spirit of its WTO obligations in full. This would benefit both of our countries and strengthen the global trading system.”

Since China entered the World Trade Organization on December 11, 2001, exports of US goods to China have grown by 190%, and China has gone from being the United States’ fifteenth to fourth largest export market.

In 2007, the report noted, the US Administration will continue to seek improvements in the areas of concern on two tracks. It will continue to work cooperatively and pragmatically with China on WTO implementation issues in bilateral forums such as the Joint Commission on Commerce and Trade (JCCT).

The US authorities will also work on strengthening commitment to the WTO’s underlying economic principles through the newly created Strategic Economic Dialogue. When these efforts do not achieve desired results, however, the Administration will not hesitate to use the range of tools available, including WTO dispute settlement procedures and the application of US trade laws, to ensure China’s compliance with international trade commitments and norms.