WASHINGTON-China scrapped plans to implement its controversial Wi-Fi encryption standard and agreed not to mandate a home-grown third-generation mobile-phone technology, concessions made to Bush administration officials amid rising election-year tensions over the U.S. trade deficit with China, China’s fixed currency and outsourcing of American jobs to China.
The U.S.-China trade agreement, preceded by months of negotiations and stern warnings by top Bush cabinet members, followed a meeting yesterday between Chinese Vice Premier Wu Yi and administration officials, including Commerce Secretary Donald Evans and U.S. Trade Representative Robert Zoellick.
“This is a landmark day and a very fruitful day in terms of the developing relationship between the United States and China,” said Evans at a press conference yesterday.
Wu, who will address the U.S. Chamber of Commerce tonight, is participating in the Joint Commission on Commerce and Trade meeting here.
“The meeting proved to be a complete success,” said Wu.
Before yesterday’s accord to indefinitely suspend the scheduled June 1 rollout of China’s Wi-Fi security standard, U.S. officials hinted in recent weeks they were prepared to bring another complaint against China at the World Trade Organization.
In March, the U.S. filed the first complaint against China-which joined the WTO in 2001-over its tax policy for semiconductors.
“This is a very positive outcome for our trade relationship with China,” said Rhett Dawson, president of the Information Technology Industry Council. “The decision by the Chinese to continue to develop the WAPI (WLAN Authentication and Privacy Infrastructure) standard through the international standards process will benefit the Chinese and global industry, and consumers everywhere. Being able to use the Internet anytime, anywhere is key to future productivity, and Wi-Fi is one of the key wedge technologies that allow us to link not just people to people, or people to machine, but machine to machine.”
As with the WAPI and silicon chip disputes, the United States argued China’s policies discriminated against American firms.
The United States has voiced similar concerns regarding China’s unique TD-SCDMA standard for 3G wireless systems. China, an emerging, underserved market of 1.3 billion people, is already the world’s biggest mobile-phone market.
According to a USTR release, China agreed to respect 3G-technology neutrality. In addition, the administration said China will let its telecom carriers make their own choices on 3G standard adoption and will not be involved in negotiating royalty payments with relevant intellectual property rights holders.
