China is still not doing enough to fulfill its WTO obligations nor to rein in an "epidemic" of counterfeit goods, the US government said in an annual trade report to Congress.
The report presented by US Trade Representative Rob Portman also reaffirmed the administration's desire to clinch a global deal at the World Trade Organisation, and to promote Middle East reform through trade opening.
It praised China, which is the target of a mounting protectionist clamour among US lawmakers, for taking major steps to liberalise its economy since joining the WTO in late 2001.
"At this point, however, China's implementation of its WTO obligations is still incomplete," the report said, singling out abuses of intellectual property rights (IPR).
"Counterfeiting and piracy in China remain at epidemic levels and cause serious economic harm to US businesses in virtually every sector of the economy," it said.
"In 2006, the administration will continue its relentless efforts to ensure China's full compliance with its WTO commitments, with particular emphasis on reducing IPR infringement levels in China," the report said.
The United States wants to cooperate with China on trade questions, it said.
But it warned that the administration "will not hesitate to employ the full range of dispute settlement and other tools available" to force China to heel on trade disputes.
Portman wrote in the report that his department remained committed to wrapping up the WTO's "Doha round" of liberalisation talks this year, despite stuttering progress on the all-important question of agricultural tariffs.
"The potential benefits from the successful Doha round for the United States and its trading partners, especially in the developing nations, are enormous, and we will continue to do all we can to achieve a successful result," he said.
"In parallel to its Doha round efforts, the administration will move vigorously to negotiate new bilateral and regional trade agreements to create a host of new opportunities for US workers, farmers and businesses," he added.
The United States clinched its 14th bilateral free trade agreement this week with the conclusion of talks with Colombia. It is in FTA talks with 10 more countries including South Korea.
Portman also reported to Congress on the progress of President George W. Bush's Middle East Free Trade Area (MEFTA) initiative, proposed in 2003 as a way of bolstering democratic and economic reform in the restive region.
"This year opened with significant movement toward making the MEFTA a reality," the official wrote, noting the sealing of FTAs with Bahrain, Morocco and Oman.
