CHINA / National

China not to blame for US trade deficit
Updated: 2006-03-25 09:17

A senior World Trade Organization (WTO) official said in Geneva on Friday that China was not to blame for the huge US trade deficit and Washington could not solve this problem through protectionism.

"Trade imbalance with China has given rise to certain proposed measures in the Congress, and clearly the US administration is watching that particular imbalance rather carefully," said Clemens Boonekamp, director of the WTO's Trade Policy Review Division.

"But it's not bilateral imbalance that you need to worry about,and to put it in more economic terms, the actual overall trade imbalance, the current account imbalance, is a result of policies elsewhere," Boonekamp told reporters after the WTO's three-day policy review of the United States.

Boonekamp reminded reporters that the US administration and the Congress were actually divided on the US-China trade deficit issue.

"I don't think the US administration is actually blaming China. There is, however, a lot of political pressure, political noise particularly in the Congress that says China is to blame for this in some way or another," he said.

The official said the current situation with China was in some way a repeat of what happened with Japan in the early 1980s, except that the U.S. was not taking the same kind of measures that it took very quickly against Japan.

"The U.S. administration is certainly resisting what's taking place in the Congress at the present moment," he noted.

According to the official, nearly all WTO members expressed their concerns about the U.S. "twin-deficits" during the three-day policy review meeting.

The WTO members also expressed worries that the US fiscal and trade imbalances might give rise to protectionist sentiments.

Asked whether he had given some direct recommendations to the US on the imbalances, Boonekamp said he had only indirect suggestions: protectionism is not an answer.

"This clearly is a macroeconomic phenomenon, part of the global trade imbalance phenomenon, and not a problem to be addressed by trade protectionism," he stressed.