U.S. trade office says Chinese laws may breach WTO rules

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China’ bank technology restrictions and a draft anti-terrorism law may run counter to the country’s international trade commitments, the U.S. Trade Representative said in a report released on Wednesday.

The U.S. trade office’s regular review of telecommunications trade continued the pressure over initiatives that have upset U.S. industry groups and that the Obama administration has also raised at the highest level with Chinese counterparts.

Rules asking technology suppliers to Chinese banks to divulge source code, pushing China’s state-owned banks to buy technology domestic vendors, “may raise substantive concerns” about China’s obligations a range of World Trade Organization agreements, the report said.
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The rules may also have been adopted without sticking to China’s commitments to provide adequate time for public comment on draft measures and to publish measures, it said.

The draft counter-terrorism law “has generated serious concerns among U.S. stakeholders and may raise questions with respect to China’s obligations,” the report said.

A senior U.S. Treasury official said on Monday, during a visit to Beijing by U.S. Treasury Secretary Jack Lew, that China had agreed to delay implementing the bank rules.

Industry groups have been cautious about the prospect of launching WTO action against China, which can take years.

USTR said it would continue to press for the bank rules to be suspended and urge China not to act on the draft counter-terrorism law.

In a separate report, USTR detailed a wide range of trade barriers U.S. firms face in exporting, including to China, where issues range from increased tariffs on aircraft to foreign investment limits and a ban on U.S. beef.

“China remains among the least transparent and predictable of the world’s major markets for agricultural products, largely because of uneven enforcement of regulations and selective intervention in the market by China’s regulatory authorities,” USTR said.(Reuters)