Trade official urges action on China, Russia ties

AP News
Posted: Feb 29, 2012 2:00 PM
Trade official urges action on China, Russia ties

Congress, acting in concert with the administration, took steps Wednesday toward overturning a federal court ruling that restricted the government's ability to impose higher tariffs on China and other countries that subsidize exports to the United States.

Republican and Democratic leaders of the House Ways and Means Committee, which oversees trade issues, put forth the bill that would restore the government's authority to respond when countries such as China and Vietnam use unfair trade practices to sell goods overseas.

Senate Finance Committee chairman Max Baucus, D-Mont., and committee member John Thune, R-S.D., quickly followed suit with a parallel Senate bill. They said some 80,000 jobs have been protected from predatory trade practices since the government began using these countervailing duties in 2007.

The bipartisan legislation emerged as the administration's top trade official, U.S. Trade Representative Ron Kirk, urged Ways and Means members to act quickly both on the China issue and on the normalization of market relations with Russia.

Kirk said the "flawed" court decision "jeopardizes the ability of the United States to remedy the harmful effects of unfairly subsidized imports."

A U.S. Court of Appeals ruled last December that the Commerce Department lacks legal authority to impose punitive duties on subsidized imports from countries such as China and Vietnam that still have remnants of socialist-based economic systems.

In 2009 the Barack Obama administration imposed a three-year tariff, starting at 35 percent, on U.S. imports of low-grade Chinese tires. The tariff was approved after imports of those tires rose threefold to about 46 million tires between 2004 and 2008. Last year the World Trade Organization, rejecting an appeal from China, found that the United States acted consistently with its WTO obligations in imposing the duties.

Ways and Means Committee chairman Dave Camp, R-Mich., who sponsored the legislation with the panel's top Democrat, Sander Levin of Michigan, said it was written to comply with WTO rules and "preserves our ability to fight unfair subsidies granted by countries like China that injure our industries, cost U.S. jobs and distort the market."

China's trade practices and how to deal with countries that don't play by the rules was a theme in Kirk's testimony before the hearing.

Kirk pointed to the new trade enforcement unit, the Interagency Trade Enforcement Center, that Obama outlined Tuesday during a speech to the United Auto Workers. Obama said the new center would bring "the full resources of the federal government to bear" to level the playing field for U.S. workers.

Levin said he hoped the new agency would "focus immediately on China's duties on auto exports, its practices in rare earth restraints, its export credit program, its forced technology transfer and its lack of transparency and use of intimidation as a trade policy tool."

Kirk also asked Congress to repeal a Cold War law that has clouded trade relations with Russia. Without action to eliminate the 1974 Jackson-Vanik law, U.S. companies will be shut out of trading opportunities with Russia that will open up after Russia gains entry to the WTO later this year.

Jackson-Vanik denied normal trading relations with communist countries that restricted emigration or punished those trying to leave the country.

Camp acknowledged that U.S. relations with Russia today are "complex," with strong congressional antipathy to Moscow's human rights records and its ties to Syria and Iran, but agreed that "only if we grant Russia permanent normal trade relations will we be able to obtain the benefits of the concessions Russia made to join the WTO."

Kirk said another top trade priority this year will be concluding the Trans-Pacific Partnership, a trade agreement being negotiated with countries such as Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Japan, Canada and Mexico have also expressed interest in joining the negotiations.

Last year Congress and the White House cooperated in approving three free trade agreements, with South Korea, Panama and Colombia. The agreement with Korea is to go into effect on March 15.