Press Release

STATEMENT FROM
COMMERCE SECRETARY DONALD L. EVANS
ON AMERICA’S ECONOMIC RELATIONSHIP
WITH CHINA

“The tool that we have to press China to reform its labor standards is the designation of China as a market economy under the U.S. trade laws. As Secretary of Commerce, I’m charged with determining whether or not China meets the definition of a market economy.

“We all know that obtaining market economy status is a high priority for the Chinese leadership. Without this status, China is subject to more antidumping cases with higher duties on their imports.

“To be designated a “market economy,” countries must meet the six criteria spelled out by the Tariff Act of 1930. Labor standards and currency are two of the six criteria. In other words, China will be required to reform its labor standards and its currency policies before it can be granted market economy status.

“Last week, the U.S. and China agreed to an unprecedented dialogue to tackle these issues head-on. We’ve established a Structural Working Group so that China will hear, directly from me, exactly what steps they must take to satisfy the law. And the law is clear: China will fail to meet Market Economy status until market forces set labor and currency rates.

Until these reforms are made – and the statutory criteria are met - China will continue to be considered a non-market economy under U.S. anti-dumping law, and American companies alleging unfair trade practices are generally more likely to be successful.

“But our goal isn’t to impose dumping actions. We’re not about petitions--we’re about results. Our goal is to ensure that American companies compete on a level playing field.

Promoting economic engagement--not economic isolation--is the best way to raise labor standards and living standards in China.

“As Secretary of Commerce, I’m also focused on expanding U.S. exports to China, our fastest growing market. And we’ve seen tremendous results. Our exports to China have grown 76% during this Administration. During the first two months of 2004, exports to China are up 39% year-over-year. That means good, high-paying American jobs depend on trade with China. But the rapid progress in our export promotion efforts within the Chinese market would be jeopardized by a blunt instrument like this petition.

“Let’s continue to use the most effective tools at our disposal-the bilateral dialogue with the Chinese on market economy status at the Structural Working Group-to leverage change in China. Here’s the bottom line: Until market forces set economic decisions – including labor and currency rates, China will remain a non-market economy.”