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Letter to John Bryson and Ron Kirk, Secretary of Commerce and U.S. Trade Representative


Location: Washington, DC

In anticipation of the upcoming meeting of the U.S.-China Joint
Commission on Commerce and Trade (JCCT), U.S. Rep. Bill Pascrell, Jr. (D-NJ-8) joined a bipartisan effort in Congress to push China to take more substantive action in correcting the trade imbalance with the United States.

As a member of the House Ways and Means Committee, Rep. Pascrell is directly involved with creating national trade policies. Today, he signed a letter to U.S. Secretary of Commerce John Bryson and U.S. Trade Representative Ron Kirk urging them to hold China more accountable to correcting the trade imbalance.

The text of the letter is attached and below:

November 17, 2011

The Honorable John Bryson
Secretary of Commerce
Herbert Clark Hoover Building
1401 Constitution Ave, N.W.
Washington, D.C. 20230

The Honorable Ron Kirk
United States Trade Representative
Office of the United States Trade Representative
600 17th St, N.W.
Washington, D.C. 20508

Dear Secretary Bryson and Ambassador Kirk:

The United States and China both have a significant role to play in restoring global economic
health. Both countries have stressed the need to maintain positive economic and financial
relations and to fight against trade protectionism. The upcoming meeting of the U.S.-China Joint
Commission on Commerce and Trade (JCCT) provides an important opportunity to further that
goal by addressing longstanding and specific concerns, improving U.S. market access in China,
and furthering China's efforts to rebalance its economy. In addition to addressing specific
barriers, the JCCT should help to supplement the broader effort by China to rebalance its
economy away from export dependence.

As shown clearly at the Committee's hearing last month, the list of concerns with China is long.
These concerns include WTO-inconsistent subsidies including directed lending, imposition of
harmful "indigenous innovation" policies, persistent failure to adequately protect intellectual
property, currency undervaluation and failure to liberalize the capital account, a lack of
regulatory transparency, export restraints, adoption of sanitary and phytosanitary measures that
are not supported by science and block U.S. agriculture exports, and other barriers to U.S.
exports and investment. While we recognize progress is difficult to make on every issue at each
meeting, it is important that the JCCT process be used -- throughout the year -- to make progress
in each of these areas and that the trajectory of change is always in the direction of improved
market access for U.S. companies, ranchers, farmers, and workers.

Before the JCCT meeting last December, Members of this Committee wrote expressing concern
that, for too long, China's commitments have failed to lead to commercially meaningful market
access for U.S. companies. As we said then, the Administration must ensure that progress is
measured not just in the number of laws repealed. In our view, the United States should: (1)
develop commercially meaningful metrics to measure the effectiveness of commitments, such as
increased market opportunities for U.S. exports to and sales in China, which would increase U.S.
jobs; (2) measure progress with China against those metrics; and (3) where sufficient progress
fails to materialize, develop new approaches to these longstanding issues.

The enforcement of intellectual property rights is a classic example of how China's
commitments have failed to lead to real market access for U.S. companies, as well as the need to
measure progress based on commercially meaningful metrics. China has been on USTR's
Priority Watch List every year for the past seven years, and the United States has been raising
concerns about China's unacceptable levels of software piracy, the need for meaningful
enforcement of U.S. intellectual property rights with respect to products sold in and exported
from China, and unwarranted restrictions on market access for U.S. innovative products into
China since at least 2004. Last year at the JCCT, the United States and China focused on
software piracy, and China agreed to: adopt software asset management systems for government
agencies; make budgetary allocations for purchasing legal software; and commit thirty major
Chinese state-owned enterprises to participate in the same program. But, one year later, full
implementation has not occurred, and we understand that U.S. companies have not seen a
meaningful increase in the market share held by legitimate software, as would be expected from
these commitments.

In the same vein, we noted in our letter last year the various trade-distorting policies in China's
renewable energy sector. While China agreed to eliminate its WTO-inconsistent local content
requirement for wind-power equipment at the 2009 JCCT meeting, we noted that U.S. companies
continue to face myriad other market access barriers that have rendered the removal of the local
content requirement moot. Among these, we have significant concerns with expanding tech
transfer requirements that force U.S. companies to forfeit their intellectual property rights.
Unfortunately, while USTR continues to investigate these issues, little commercially meaningful
progress appears to have been made in opening this sector and providing a truly level playing
field for U.S. companies.

Similarly, last year China made important commitments at the JCCT and at the Strategic &
Economic Dialogue (S&ED) to repeal indigenous innovation policies that required U.S.
companies to develop their intellectual property in China in order to gain access to China's vast
government procurement market. But it is unclear whether Chinese procuring entities,
particularly at the sub-central level, have truly opened procurement to U.S. companies that
developed their intellectual property outside of China. Moreover, government procurement is
only one aspect of China's web of indigenous innovation policies that discriminate against U.S.
companies. China also uses standard-setting and product certification processes that require U.S.
companies to forfeit their intellectual property rights as a requirement for doing business. This
web of discriminatory policies is now being applied to prevent U.S. companies from selling
electric vehicles and other next generation auto technology in China. We hope that the upcoming
meeting of the JCCT will provide an opportunity for stocktaking and further progress on these

In conclusion, we once again urge you to measure progress with China using commercially
meaningful metrics and benchmarks and to press China at the JCCT on that basis. Where
progress fails to materialize, the Administration, working with Congress and stakeholders,
should seek to develop new approaches to these longstanding issues.

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