VZCZCXYZ0000
PP RUEHWEB

DE RUEHBJ #2878/01 2062236
ZNR UUUUU ZZH
P 242236Z JUL 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 8780
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS BEIJING 002878 
 
DEPT OF TREASURY FOR OASIA DOHNER/CUSHMAN 
USDOC FOR 4420/ITA/MAC/OCEA/RKARNAK/IKASOFF/NMELCHER 
USDOC FOR 5130/ITA/IA/DSPOONER 
USDOC FOR 5120/ITA/IA/RLORENTZEN 
 
INFO CHINA POSTS COLLECTIVE 
 
STATE PASS USTR FOR STRATFORD 
 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PREL ENRG EPET CH
SUBJECT: Mofcom DG Wang discusses Steel Dialogue with AUSTR 
Stratford 
 
SUMMARY 
------- 
 
¶1. (SBU) Ministry of Commerce (Mofcom) Director General for Foreign 
Trade Wang Shouwen met with AUSTR Timothy Stratford in Beijing on 
July 14 to discuss plans for the next U.S.-China Steel Dialogue. 
Wang and Stratford agreed that the Dialogue will include discussion 
of the competitiveness of the steel industry in both economies. 
Stratford proposed that the Dialogue take place the week of 
September 8 and encouraged the inclusion of labor and environmental 
issues in the official agenda. He also proposed that the PC strand 
industry participate in the Dialogue, pointing out that the Chinese 
regard PC strand as a steel product itself.  Wang agreed to discuss 
the above points with the relevant government authorities and the 
Chinese steel industry. 
 
Dates and agenda for Steel Dialogue still under review 
--------------------------------------------- --------- 
 
2.(SBU) Following up on a prior exchange of letters, AUSTR Stratford 
and DG Wang discussed possible dates and agenda items for the 
upcoming Steel Dialogue. Stratford proposed holding the Dialogue the 
week of September 8, and mentioned that the weeks of October 13 and 
20 may also work for the U.S. side.  Wang replied that he will 
discuss these dates with industry and provide a response to USTR 
soon. 
 
¶3. (SBU) Turning to the agenda, Stratford noted that both sides had 
already agreed to discuss the competitiveness of the steel industry 
in the U.S. and China.  Stratford asked Wang to reconsider adding 
labor and environmental issues to the list of topics addressed in 
the Dialogue.  (Note:  In previous meetings and in written 
correspondence, Wang argued that these topics should not be included 
in the Steel Dialogue, as labor and climate change dialogue 
mechanisms have already been established between relevant 
counterpart departments of the two governments.  End note.) 
Stratford pointed out that the U.S. understands China's request to 
include trade remedy issues that are unique to the steel industry in 
the Dialogue.  By the same logic, he explained, there are certain 
labor and environmental issues that apply uniquely to the steel 
industry and the Steel Dialogue provides an appropriate channel for 
discussing these specific issues. 
 
¶4. (SBU) Wang responded that it is not appropriate to discuss 
environmental or labor issues in the Steel Dialogue, noting that 
Chinese environmental protection and labor ministries should be in 
the lead on these topics.  He stated that the first Steel Dialogue 
came about as a result of a Section 421 petition, so trade remedies 
should continue to be included in the agenda.  Stratford agreed that 
trade remedies should stay on agenda, and pointed out that labor 
played a major role in the 421 petition that prompted the Steel 
Dialogue.  He explained that although USTR is not the lead U.S. 
agency on labor or environmental issues, it is authorized to discuss 
these issues in the broader context of trade.  He asked Wang whether 
it would be possible to carve out a space to discuss these issues on 
the sidelines of the Dialogue if not on the primary agenda.  Wang 
replied that the Embassy should request these meetings and said that 
he would ask Mofcom's North American Affairs Department to follow up 
on the request. 
 
PC strand industry participation to be determined 
--------------------------------------------- ---- 
¶5. (SBU) Stratford referred to a letter he received in late June 
from Wang, which came in response to an earlier request by USTR that 
the Dialogue include the PC strand industry as a representative of 
downstream industries.  Stratford pointed out that, according to 
Wang's letter, China considered PC strand to be a steel product 
itself, so it could not represent the downstream industry in the 
Steel Dialogue.  Stratford stated that if China considers PC strand 
to be a steel product, then it makes sense for the PC strand 
industry to participate in the Dialogue as a member of the steel 
industry.  Wang replied that while he does not oppose the 
participation of the PC strand industry, Chinese steel producers may 
oppose it.  He agreed to follow up with the Chinese steel industry 
on this issue. 
 
Mofcom concerned about poultry issues 
------------------------------------- 
¶6. (SBU) Wang raised concerns regarding certain restrictions on 
poultry trade between the U.S. and China.  Stratford told Wang that 
 
the U.S. and China share common interests in resolving poultry 
issues and said that USTR welcomed the recent visit of a Chinese 
delegation that visited Washington to discuss this issue.  Wang 
agreed that this was a positive development and further underscored 
Mofcom's concerns about poultry issues. 
 
Mofcom inquires about textile transshipment quotas 
--------------------------------------------- ----- 
¶7.  (SBU) DG Wang raised concerns about a recent U.S. Customs 
decision regarding transshipment of Chinese textiles through other 
countries to the United States in 2006-2007.  DG Wang noted that, if 
indeed there were transshipments, the volume amount of quota 
involved in the transshipments should be counted against the 
2006-2007 textile quotas and not the current 2008 quotas under the 
U.S. - China Textile Agreement.  Stratford noted that USTR's Special 
Textile Negotiator, Scott Quesenberry, was handling this matter and 
has been in communication with Minister Counselor for Economic and 
Commercial Affairs Dai at the Chinese Embassy in Washington. 
 
RANDT