الامريكى. and Chinese government officials just completed the 19th meeting of the U.S.-China Joint Commission on Commerce and Trade (JCCT). This year was the 25th anniversary of the first JCCT meeting in 1983 as a dialogue for resolving trade issues and developing bilateral trade opportunities. No major breakthroughs occurred at the meeting, which is good news and bad news.

U.S.-China two-way trade has grown from $5 مليار دولار سنويا في 1982 إلى $387 مليار في 2007. الامريكى. exports to China have increased from $2.2 billion to $65.2 مليار, the third largest export market for U.S. منتجات. في 2007 الامريكى. soybean and products exports alone were $4.3 مليار, almost twice the size of total U.S. exports to China in 1982. إجمالي الامريكى. imports from China increased from $2.8 مليار في 1983 إلى $321.5 مليار في 2007.

Positive outcomes of the one-day meeting centered on intellectual property rights, health care and agriculture. الامريكى. movie, music, software and book industries estimate they lose $3.5 billion to piracy each year in China, حتى من $1.1 billion per year when China joined the WTO in 2001. Healthcare was guaranteed to make the list of issues after concerns raised in the U.S. over the last year about drug imports from China. China agreed to streamline procedures on importing medical devices, ل $860 million market in 2007. China agreed to remove barriers to poultry imports from the U.S. related to avian influenza, except for Virginia and Arkansas, and to allow seven U.S. poultry processing plants to resume exports to China.

These agreements are important, but do not define new policy directions. This partly reflects that the Bush Administration will be done in just over four months. Keeping communication lines open are important, but the leaders were not working towards further outcomes next year. The low key results also recognize that most trade between the two countries operates without heated debates over currency values and sanitary and phyto-sanitary issues.

Despite the news about increased trade, U.S.-China trade is far from what it could be. الامريكى. agricultural exports to China were record large in 2007 في $8.3 مليار, مع 2008 trade to be still higher due to commodity price rises. كما هو موضح سابقا, soybean and products exports totaled $4.3 مليار في 2007; that was 51.9 percent of total agricultural exports. Raw cotton exports were $1.5 مليار, 18.1 percent of total exports. Hides and skins were $0.8 مليار, 9.6 percent of exports. These three product categories accounted for 79.6 percent of agricultural exports to China. Consumer oriented products, everything from meat to vegetables to tree nuts, كانوا فقط $1.1 مليار, 13.2 percent of agricultural trade. Poultry meat was the leader at $348 مليون; thus the importance of the avian influenza issue. Red meat exports (لحم خنزير) كانت $195 million in 2007, double a year earlier, و 2008 sales will more than double again due to a shortfall in Chinese pork production.

الامريكى. beef continues to be left out of trade. At the JCCT the U.S. pushed for full market access for beef based on the OIE internationally agreed upon guidelines. China reportedly countered with only letting in beef less than 30 أشهر من العمر. الولايات المتحدة. declined, and the two countries agreed to technical talks on beef safety. There is no need for technical talks because this has already been hashed out at the OIE. This appears to be a case where China is using regulations to stop imports when it could easily allow market access.

Because of its strong exports of manufactured good in recent years, China has an estimated $1.6 trillion of hard currencies reserves mostly held in U.S. dollar denominated assets. That looks like the mercantilist policy of a couple hundred years ago when European governments exported products and amassed piles of gold. China does not need to restrict imports to protect a limited amount of hard currency or to protect the value of its currency. منذ 2005 the Chinese government has allowed its currency to appreciate about 20 percent against the dollar. That is to slow for some policy analysts and politicians, but China is adjusting monetary policy to the new economic realities. The slow moving reforms have caused distortions in China’s domestic economy with slower growth in demand than would occur with a stronger currency and lower reserves. It has also resulted in slower export demand in the rest of the world, including agricultural products from the U.S. Middle income Chinese would be demanding more than $1.1 مليار الامريكى. consumer-oriented agricultural products if there was greater market access.

الولايات المتحدة. and China can continue to have annual JCCT meeting where real work is done without ever addressing the critical issue of China opening its consumer markets as envisioned when it joined the WTO. That will continue to be the unacknowledged shadow in the room.

Some political leaders in both countries appear to believe they can play hard ball on monetary, economic and trade policy issues without suffering economic repercussions in their respective countries. That policy option became obsolete when China joined the WTO or shortly thereafter. China cannot afford to lose a chunk of the U.S. market due to a policy dispute, والامريكى. cannot afford to lose the products supplied by China nor what has become the third largest market for U.S. product exports. الولايات المتحدة. could probably make the adjustments easier than China, but consumers and producers in both countries would be big losers.

China showed in the WTO negotiations that it will ignore its own best interest to continue its policy of managing trade. الامريكى. officials need to be clear thinkers on economic and trade policies until Chinese leaders realize that their best interests lie in increasing the standard of living through open trade rather than with managed trade with large currency reserves that make its citizens less well off.