China accuses US of protectionism in tire case

[August 12, 2009]  BEIJING (AP) -- A Chinese trade official said Wednesday that a U.S. complaint about China's tire exports smacks of protectionism and appealed to Washington to avoid taking steps that might harm relations.

The government of President Barack Obama is deciding what action to take after the U.S. International Trade Commission ruled in June that increased imports of Chinese tires were harming American tire producers.

"I believe the case is neither supported by facts nor does it have valid legal grounds," a deputy commerce minister, Fu Ziying, said at a news conference.

"It is against basic WTO principles and looks like trade protectionism," Fu said. "We hope the U.S. government will refrain from taking action, for the long-term healthy and stable development of U.S.-Chinese relations."

In addition to tires, Washington has launched a series of investigations into whether Chinese exporters were dumping goods including wooden bedroom furniture, honey, candles, gift boxes, industrial chemicals and fresh garlic.

The union that brought the latest case, the United Steelworkers, says Chinese tire exports to the United States more than tripled in the 2004-08 period to 41 million tires a year. The union said that led to the loss of 5,100 American jobs and another 3,000 jobs could be lost this year.

The union is urging Obama to cap imports of Chinese tires at 21 million per year.

Fu said that while Chinese tire exports to the United States increased, profits for U.S. tire producers doubled over the same period.

"So we can conclude that China's exports of tire products to the United States posed no material injury to U.S. tire makers," he said.

Fu said the case was prompted by the financial problems suffered by U.S. auto and tire producers due to the country's economic crisis.

"They are blaming China or Chinese products for their decreasing profits," Fu said.

[Associated Press; By JOE McDONALD]

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