January 24, 2018 / 6:17 PM / 6 months ago

U.S. not starting trade war, but sees China tech threat - Ross

DAVOS, Switzerland (Reuters) - The United States is not starting a trade war but trying to level the playing field of global commerce and fend off Chinese protectionism, including a “direct threat” in high-tech goods, U.S. Commerce Secretary Wilbur Ross said on Wednesday.

Ross was speaking a day after Washington imposed steep import tariffs on washing machines and solar panels, billed as a way to protect American jobs by President Donald Trump, who is widely expected to take further action on steel, aluminium and intellectual property.

“The Chinese have been for quite a little while been superb at free trade rhetoric and even more superb at highly protectionist behaviour,” Ross said.

The “next area of challenge” would be China’s high tech ambitions under its 2025 plan, which aimed to make China a world leader with enormous market share “in most all of the new technologies that you can name and spell”, Ross said.

“That is a direct threat. And it is a direct threat that is being implemented by technology transfers, by disrespect for intellectual property rights, by commercial espionage, by all kinds of very bad things. So it isn’t just the overcapacity in the historic industries.”

He said U.S. Trade Representative Robert Lighthizer was working very hard on investigating on intellectual property, but his report was not expected for some time.

Ross was speaking at the World Economic Forum in Davos, alongside business leaders and World Trade Organization chief Roberto Azevedo, who said he expected China to dispute Trump’s trade challenges.

“I think China is going to respond to those complaints, saying that that is within the rules,” Azevedo said.

Earlier on Tuesday Jack Ma, the founder of China’s Alibaba Group Holding Ltd (BABA.N), said he was scared by the prospect of a trade war, which he described as a disaster.

“If you want to launch a trade war it’s easy, but it takes about 30 years to fix that pain,” Ma said.

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Ross played down the idea that the United States was starting a trade war.

“Nobody is trying to ignite a gigantic thing like Smoot-Hawley did during the Depression,” he said, referring to a protectionist 1930 law that raised thousands of U.S. tariffs.

But he also gave a nonchalant response to South Korea’s vow to challenge the latest U.S. tariffs at the WTO.

“The fact that they may get a favourable decision (at the WTO) doesn’t mean that it’s a correct decision,” he said.

HAND-WRITTEN NOTES

Trump’s administration has also been accused of courting a trade war by vetoing new WTO appeals judges, hobbling the trade dispute settlement system and running the risk that trade friction will explode into tit-for-tat actions.

The United States has not said what would persuade it to lift its veto on WTO judges and Ross declined to elaborate.

“I think we should negotiate that in the conference room not in the press room,” he said.

Azevedo said the United States had concerns about the system after it exposed shortcomings in its trade practices and said the U.S. veto would significantly slow litigation, but may not stop it altogether.

Ross, who was clutching a pad with notes hand-written in blue ink, reading “NAFTA, Tax Reform, POTUS@Davos, Tariffs”, said the United States had supported the world trading system for too long without demanding reform.

But he steered away from suggestions that the United States was giving up on the WTO, saying that the world still needed an arbiter and needed to avoid “a total free-for-all”, even if it did not agree with every aspect.

“We don’t intend to abrogate leadership but leadership is different from being a sucker and being a patsy,” he said.

Reporting by Mark Bendeich, writing by Tom Miles

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