September 12,2003

Baucus Meets with Chinese Commerce Minister Lu Fuyuan

Senator Requests Meeting to Discuss U.S.-Chinese Trading Relationship

(Cancun, Mexico) The Ranking Member of the U.S. Senate Finance Committee, U.S. SenatorMax Baucus (D-Mont.), today met with Chinese Commerce Minister Lu Fuyuan during the WorldTrade Organization (WTO) Ministerial meeting in Mexico to discuss the U.S.-China tradingrelationship.

During the meeting, Baucus extended his appreciation to Minister Lu for the generallypositive effect the Chinese have had on the Doha negotiations, but he warned that some of theproblems with U.S. trade with China, if left unaddressed, could have negative politicalconsequences.

"I worked hard for China's accession to the WTO, and I am pleased at the constructive roleChina has played in the Doha negotiations,” Baucus said. “But if China doesn't do anythingregarding its failure to allocate agricultural tariff rate quotas properly, the lack of transparency inthe regulations for doing business in China, and – perhaps most importantly – about its undervaluedcurrency, I'm afraid that may set the stage for a political backlash against the U.S. economicrelationship with China."

Baucus has long criticized China for intervening in currency markets to depress the value of itscurrency, arguing that this practice artificially lowers the price of Chinese exports and harms thecompetitiveness of U.S.-manufactured exports. The Senator also expressed concern over regulationsChina is developing that may require the government to exclusively purchase domestic goods andservices, including software, which could discourage growth in China and internationally.

"As the U.S. economy continues to falter and we lose even more jobs, China's undervaluedcurrency may lead to popular sentiment against China's economic policies," the Senator added. “Ibelieve that both countries can and have already greatly benefited from an open trade relationship,”Baucus said. “But in order for this to be a successful endeavor, both the United States and China mustbe willing to engage in free and fair trading practices.”