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