EU and US urge China to play by trade rules

Europe and the United States yesterday held out the threat of a trade war with China unless it started abiding by international rules.

Donald Evans, the US Secretary of Commerce, said America wanted a level playing field and insisted it would not tolerate China holding a "stacked deck [of cards]". He said after a meeting with the Chinese Prime Minister, Wen Jiabao: "The message is ... that job security, job creation and economic growth in America is dependent upon free and fair trade. When we see the field tilted ...we're going to let them know that is not acceptable."

Pascal Lamy, the European Trade Commissioner, who was in London to meet the Secretary of State for Trade and Industry, Patricia Hewitt, said the EU had "serious problems" with China on some issues. He accused China of setting up a twin-track distribution system for imported and Chinese-made cars in breach of its obligations to the World Trade Organisation since becoming a member two years ago.

Asked whether Brussels might make a complaint to the WTO, he said: "It is something that is available to us and the Chinese know that." But both men played down the threat of unilateral sanctions.