Five years after the U.S. Congress granted Permanent Normal Trade Relations status to China, United Steelworkers President Leo. W. Gerard says China still provides large subsidies to its own industries that harm U.S. manufacturers.

The 2006 annual report of the U.S.-China Economic and Security Review Commission released last week says China has been seriously inconsistent in meeting the obligations it incurred upon its entry into the World Trade Organization.

The Commission, charged by Congress to evaluate the national security implications of bilateral trade between the U.S. and China, found that China's adherence to its many WTO obligations is inconsistent.

As part of its centralized industrial policy, China continues to use a wide range of subsidies to encourage the manufacture of goods for export and to secure foreign investment in its manufacturing sector, the report found. Failure to enforce intellectual property rights is another particularly egregious example of China's noncompliance with WTO rules, the report said. China fails to protect copyrights, inventions, brands, and trade secrets.

Gerard applauded a Commission recommendation that Congress urge the U.S. Trade Representative to press ahead aggressively with a WTO case against China for its failures to enforce property rights.

China this year is expected to export US$284.9 billion worth of goods to the United States, up from US$243.4 billion in 2005. Total U.S. exports to China were US$41.8 billion in 2005 and an estimated US$56 billion this year.

China, meanwhile, has not accepted the mantle of responsible leadership that Congress expected when it ended the annual Most Favored Nation debate by awarding China PNTR status, allowing entry into the WTO, the report found. It was expected that China would, among other things, adhere to the rules of a rules-based trading system, open its markets to American exporters, investors, businesses and farmers, become a member of the community of nations that promotes democratic government and human dignity and promote peace and stability in the world.

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