DEMARCHE TO G20 NATIONS ON REJECTING PROTECTIONISM

UNCLAS BEIJING 004530

SIPDIS
SENSITIVE

FOR EAP/CM PAM PARK; FOR EEB MANISHA SINGH
USDOC FOR ITA/MAC/KASOFF
STATE PASS USTR
USTR FOR STRATFORD/MAIN
TREASURY FOR MANAGING DIRECTOR DAN WRIGHT

E.O. 12958: N/A
TAGS: ECON ETRD CH
SUBJECT: DEMARCHE TO G20 NATIONS ON REJECTING PROTECTIONISM

REF: STATE 125609

THIS CABLE IS SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET
DISTRIBUTION.


1. (SBU) Treasury Secretary Paulson, USTR Schwab, Assistant
to the President Daniel Price, Deputy Secretary of Commerce
Sullivan and other senior U.S. Government officials
delivered reftel demarche talking points throughout the
course of the December 4-5 Strategic Economic Dialogue (SED)
in Beijing. They also made these points in a number of
bilateral meetings with China's Ministry of Commerce held
in the days preceding the SED. In each case, senior
Chinese officials also decried the specter of rising
protectionism, reiterated China's commitment to avoiding
protectionist measures, and encouraged continuing
discussion of this issue in both bilateral and multilateral
fora.


2. (SBU) Minister of Foreign Commerce Chen Deming
additionally noted that WTO rules should be the criteria
for judging "protectionism". In separate bilateral
meetings with Chen, USTR Schwab pointed out that some
measures - such as countries raising tariffs from current
applied rates to bound rates permitted under their WTO
commitments - while not violating WTO rules per se, would
still be very unhelpful in the current global economic
environment. Such measures could, Schwab noted, affect
China's exports. Schwab also cautioned against trade-
distorting measures to artificially stimulate exports
(which could potentially apply in China's case).

PICCUTA