US Government Criticizes China's 'Ambiguous' Legal Framework

by Glen Shapiro, LawAndTax-News.com, New York

03 April 2003

In its 422 page National Trade Estimate Report on Foreign Trade Barriers, the US Trade Representative's office has criticised major trading partners including Japan, the European Union, and China, citing the latter's 'ambiguous' legal regime as a barrier to foreign investment.

In the 30 pages of the report devoted to China, it was suggested that rules issued by the central, provincial, and local governments often contradict each other:

'This lack of a clear and consistent framework of laws and regulations can be a barrier to the participation of foreign firms in China's domestic market,' the US government report observed.

The Trade Representative's Office also suggested that the lack of an effective commercial dispute resolution process, local protectionism and state monopolies in some sectors, transparency issues with regard to drafting new legislation, and corruption all serve to discourage foreign investment in mainland China.

Japan was called upon to more aggressively deregulate in order to provide greater market access for US products, and the European Union's plans to require e-commerce retailers to collect VAT were condemned, with the report suggesting that if passed into law, the proposal would impose 'stringent administrative burdens' on US companies.

In a statement released to accompany the report, US Trade Representative, Robert Zoellick announced that:

'American workers, businesses, and farmers expect a level playing field abroad...The Bush Administration is committed to identifying unfair barriers to US exports and to working aggressively with our trading partners to eliminate those barriers.'

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