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U.S., China tout progress on trade irritants

By Doug Palmer and Paul Eckert

WASHINGTON (Reuters) - After a year of clashes on trade and investment issues, senior U.S. and Chinese officials touted progress on Wednesday on a number of commercial irritants as a sign of the commitment both countries have to building a stronger relationship.

China agreed to take further steps to address U.S. concerns about widespread piracy and counterfeiting of American-made goods by strengthening enforcement of intellectual property rights and promoting the use of legal software by state-owned banks and state-owned enterprises, Chinese Commerce Minister Chen Deming told reporters after the meeting.

Such recycled pledges are a staple of the annual U.S.-China Joint Commission on Commerce and Trade (JCCT), but U.S. officials said it was important to keep up pressure on the issue because of the big potential payoff for U.S. firms.

"Some of these issues may seem a bit esoteric, but they can make the difference between millions, billions of dollars of new exports and jobs being retained here at home," U.S. Trade Representative Ron Kirk told reporters.

The past year has been a particularly bumpy one for the U.S.-China trade relationship, with the United States initiating a number of trade complaints against China at the World Trade Organization and slapping duties on high-value Chinese exports such as solar cells and wind turbine towers.

During the recent U.S. presidential campaign, both President Barack Obama and his Republican rival Mitt Romney also argued about who would do a better job of standing up to Beijing and fighting for U.S. jobs.

Chen said the United States made commitments in Wednesday's meeting to promote exports of high-technology goods to China and promised Chinese companies fair treatment when their plans to invest in the United States are reviewed for national security purposes.

China has long pressed the United States to ease its restrictions on exports of high-technology goods, and the Obama administration is in the process of a comprehensive reform effort that is expected to make it easier for many countries, including China, to buy those items from American firms.

However, acting Commerce Secretary Rebecca Blank said that would not apply to items on the U.S. munitions list because the United States does not allow arms exports to China.

The JCCT is an annual forum launched in 1983 for the two countries to address trade and investment concerns.

JOBS AND ECONOMIC GROWTH

Some recent high-profile Chinese investments in the United States have been rejected on national security grounds, although U.S. officials say most projects are welcomed with open arms as a source of new jobs and economic growth.

The head of the Chinese delegation, Vice Premier Wang Qishan, took a shot at U.S. suspicions of Chinese state-owned enterprises that dominate China's economy and the important but often unclear role of the ruling Communist Party in those firms.

"You can't deny the fact that some Americans lack understanding of China and have stereotypes about China," he said in remarks at a dinner of officials and business leaders of the two countries on Wednesday night.

Wang said he asked U.S. counterparts, "Can you conduct a security check without doing a political background check? Do you normally ask Americans what party they belong to?"

Kirk estimated total Chinese investment in the United States at about $9 billion, up "over 600 percent" in last three years.

The U.S. trade deficit with China hit a record $295 billion in 2011 and is expected to set a new record this year when final figures are announced in February.

Chen said China also pledged not to force U.S. companies to transfer technology as a condition for doing business in China and negotiate "as quickly as possible" to join the WTO's agreement on government procurement.

However, both U.S. and Chinese officials said China and other WTO members remained far apart on the definition of public works projects that would be covered in any market-opening agreement.

China also agreed to delay a proposed regulation that could impede U.S. auto exports until the United States has a fuller opportunity to express its concerns, officials on both sides said.

U.S. Chamber of Commerce official Jamie Waterman said agriculture was another key concern for this year's talks.

In agriculture, "the absence of product approvals for roughly a year is a serious concern and has the potential to create real challenges for China," he said.

With ongoing leadership transitions in Beijing and Washington it was important that working-level officials hold up "the JCCT as one of the pillars of stability in this relationship," said Kirk.

"The true success of this plenary will be judged by those who rely on the JCCT to deliver measurable results that help stabilize and enhance our trade and investment relationships," he said.

Obama is expected to bring in a new economic team for his second term, which begins in January.

Meanwhile, Chinese Vice President Xi Jinping took over the leadership of the Chinese Communist Party in November and will become head of state at March at the annual parliament meeting.

(Editing by Christopher Wilson)

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