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213
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FM WASHINGTON
TO PRIORITY FCO
TELNO 2624
OF 102211Z OCTOBER 91
Rh13 2014
031317
MDLIAN 6061
Q DIST?
ГОР СОРҮ
INFO ROUTINE PEKING, HONG KONG, BTC HONG KONG, DTI, ACTOR
711
MY TELEGRAMS 2327 AND 2458: US/CHINA: TRADE ISSUES
SUMMARY
1. US INITIATE SECTION 301 CASE ON MARKET ACCESS. DRAFT RETALIATION LIST IN SPECIAL 301 (INTELLECTUAL PROPERTY) CASE EXPECTED IN MID-OCTOBER. US STILL EXPECT TO NEGOTIATE WITH CHINESE IN LATE OCTOBER. ADMINISTRATION HOPE THAT ACTIONS SUFFICIENT TO WARD OFF CONGRESSIONAL THREAT TO MFN.
DETAIL
2.
WHITE HOUSE ANNOUNCED ON 10 OCTOBER THAT THE ADMINISTRATION HAD INITIATED A SECTION 301 INVESTIGATION INTO FOUR OF THE MARKET-ACCESS PROBLEMS IDENTIFIED IN RECENT NEGOTIATIONS: IMPORT QUOTAS AND BANS, IMPORT LICENSING, TECHNICAL/STANDARDS BARRIERS, LACK OF TRANSPARENCY IN CHINESE TRADE REGIME. THE INVESTIGATION IS LIKELY TO TAKE THE FULL PERIOD ALLOWED BY THE STATUTE (IN PRACTICE, THIS SIMPLY IMPOSES A ONE-YEAR DEADLINE FOR NEGOTIATIONS WHICH NOW MOVE FROM AN INFORMAL TO A FORMAL US STATUTORY BASIS. IT IS ALSO VERY LIKELY TO RAISE THE TEMPERATURE A NOTCH). DETAIL BY FAX.
3.
USTR TELL US THAT THE CHINESE, WHOM THEY INFORMED IN ADVANCE OF TODAY'S ANNOUNCEMENT, HAVE CONFIRMED THAT TALKS CON BOTH MARKET ACCESS AND INTELLECTUAL PROPERTY) PREVIOUSLY ARRANGED FOR LATE OCTOBER IN PEKING MAY GO AHEAD. MEANWHILE, IN THE SPECIAL 301 (IP) CASE, USTR EXPECT TO PUBLISH A DRAFT RETALIATION LIST ON 18 OR 19 OCTOBER, ALLOWING A MONTH FOR PUBLIC COMMENT BEFORE THE DEADLINE (26 NOVEMBER) FOR A DECISION WHETHER TO IMPLEMENT SANCTIONS (WHICH WOULD THEN TAKE EFFECT ON 26 DECEMBER).
4.
US CUSTOMS SERVICE RECENTLY BANNED IMPORTS OF HAND-WRENCHES AND STEEL PIPES MARKETTED BY TWO CHINESE COMPANIES, PENDING AN INVESTIGATION WHETHER THE PRODUCTS WERE MADE IN CHINESE PRISONS (US LAW FORBIDS IMPORTS OF PRISON-LABOUR PRODUCTS). THE ACTION FOLLOWS CONSIDERABLE PUBLICITY ALLEGING SYSTEMATIC CHINESE EXPORTS TO THE
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