Grassley Urges Follow-through in U.S.-China Trade Relations

WASHINGTON – Sen. Chuck Grassley, chairman of the Committee on Finance, with
jurisdiction over international trade, today urged the senior Chinese official who will take part in this
week’s meeting of the U.S.-China Joint Commission on Commerce and Trade (JCCT) to support
concrete action following the meeting in order to address a number of outstanding bilateral trade
concerns.

On a parallel track, Grassley and Sen. Max Baucus, ranking member, last month introduced
bipartisan legislation that would give the United States more trade enforcement tools to encourage
U.S. trading partners to adhere to their trade obligations. The United States Trade Enhancement Act
of 2006 has 12 bipartisan co-sponsors.

The text of Grassley’s letter to Vice Premier Wu Yi follows.

Her Excellency Wu Yi
Vice Premier
State Council, Central Government of the People’s Republic of China
Beijing, P.R.C.

Dear Madam Wu Yi:

I regret that I’m unable to meet with you during your visit this week to Washington, DC. This year’s
meeting of the U.S.-China Joint Commission on Commerce and Trade (JCCT) is being held during
a week in which Congress is in recess. When Congress is not in session, I spend most of my time
meeting with constituents in my home state of Iowa. I understand that you will travel to a number
of states during your stay. I hope that you can visit Iowa the next time you come to the United States.
It’s been two years since I wrote you following the 2004 meeting of the JCCT. At that time, I raised
a number of issues in our bilateral trade relations. Today I’m pleased to note that after much hard
work, some of those issues appear to be resolved. Yet others remain, and I’m very concerned that
if we do not soon address them adequately, the growing imbalance in our trade relations will become
neither politically nor economically sustainable.

The frustration that I and many of my colleagues in the Senate feel is that China is not satisfying its
obligations as a member of the World Trade Organization (WTO) and as a major beneficiary of open
international trade. Infringement of intellectual property rights in China has been a major concern
for some time, yet there are few signs of improvement. Similarly, China continues to ban imports
of U.S. beef without any scientific basis. In joining the WTO, China committed to initiate
negotiations for membership in the Government Procurement Agreement as soon as possible, yet
there is no indication that such membership is imminent. Separately, government intervention in the
Chinese market, including by means of opaque regulatory processes and industrial policies, also
serves to impede trade. The clearest example of government intervention continues to be with respect
to currency exchange rates. Last July, China announced that its exchange rate would become
adjustable, based on market supply and demand, but that’s not happening yet. That type of mixed
signal only deepens the frustration.

I hope that your meetings in Washington serve to jumpstart meaningful progress in addressing each
of these issues. If it is to remain relevant, the annual JCCT meeting must be followed by constructive
engagement and concrete action. With your support, I hope that can be achieved.

Sincerely,

Charles E. Grassley
Chairman

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