US to take up China policy with WTO

“My preferred course of action is always ... direct negotiations,” US Trade Representative Ron Kirk told reporters when asked about the possibility of filing a World Trade Organization case on the issue. If negotiation proves fruitless, “then we can make a decision at an appropriate time ... whether we want to file suit,” Kirk said.

Kirk was in Brussels for talks with European Trade Commissioner Karel de Gucht after meetings in Egypt. MasterCard Inc, Visa Inc, Discover Financial Services, First Data Corp and American Express Co all declined comment on a report they had talked with Kirk’s office about barriers they face in China’s payment-processing market, estimated at nearly $1 trillion.

Currently only China Union Pay is permitted to process domestic electronic payments in China.

China promised when it joined the WTO in 2001 to remove market access restriction and provide national treatment for for foreign credit, charge and debit card companies.
A US industry official who asked not to be identified said he believed USTR had a case ready to go anytime it wanted to pull the trigger. “The case is done. This is a longstanding issue. It was raised numerous times in the past and the Chinese have continued on their merry way,” he said.

Foreign competition
China’s refusal to open its payment-processing market is “part and parcel of their broad approach to blocking foreign competition and developing national champions,” he said.
China failed to meet a December 2006 deadline for opening its payment processing market, and since then the issue has been repeatedly raised at high-level talks between the United States and China.

“The United States will continue to pursue this issue vigorously in 2010, taking further appropriate actions seeking to ensure that US providers of electronic payment processing and related services enjoy the full benefits of the market-opening commitments that China made,” USTR said in a December 2009 report.

Next week, USTR will release its annual report on the most egregious trade barriers faced by US companies. The chairman of U.S. House of Representatives Ways & Means Committee, Sander Levin, and other Democrats, in a letter, urged President Barack Obama to use that report to lay out a strategy for resolving long-standing trade barriers.
Many US companies have been reluctant to publicly call for WTO cases against China out of fear that could suffer retaliation from Beijing.