Lawmakers seek tougher stance on China trade

AP News
Posted: Oct 25, 2011 1:27 PM
Lawmakers seek tougher stance on China trade

House lawmakers united Tuesday in demanding that the administration do more to stop China's "predatory" trade practices that have devastated American industries and put Americans out of work. They differed on whether Congress should act on legislation to punish China for keeping its currency artificially low.

There's a "need to provide a sense of urgency" on the China issue, said Michigan Rep. Sander Levin, the top Democrat on the Ways and Means Committee. There's a tendency, he told administration officials at a committee hearing, to "shrug shoulders or find excuses for inaction. Neither is satisfactory for the people of this country."

Both Republicans and Democrats pressed the officials on what steps they are taking to reduce China's $273 billion trade surplus last year, its theft of intellectual property, its subsidies for Chinese industries and its undervalued currency that helps keep Chinese exports cheaper and U.S. exports to China more expensive.

But several GOP lawmakers also joined the administration in expressing reservations about legislation, passed in the Senate two weeks ago, that would threaten China with higher tariffs if China's doesn't realign its currency.

"Some in Congress focus on legislation to address currency manipulation as if it were a silver bullet," said committee chairman Dave Camp, R-Mich. "In doing so, they miss the many issues we have with China."

The White House has kept its distance from the Senate-passed bill, which opponents warn could set off a trade war with the Chinese.

Treasury undersecretary for international affairs Lael Brainard fielded numerous questions about currency legislation by saying that the administration "shares very much the frustration" of many with China's exchange rate, but that any action taken must be "consistent with our international obligations."

She added that, while the Chinese must do more, the Chinese currency, the yuan, has appreciated almost 7.5 percent against the dollar since June of last year. Appreciation alone, she said, "will not erase our trade deficit," but it is the "most powerful near-term tool available" for China to combat inflation and move to a less export-dependent economy.

House Speaker John Boehner, R-Ohio, has refused to take up the Senate bill or similar legislation sponsored by Levin. On Tuesday he repeated that unilateral action against China was "a very dangerous policy. The president of the United States ought to stand up and take a position. The key point is to lead. Where's the leadership?"

But Levin said that because currency "is not China's only predatory and trade-distorting policy, that cannot be an excuse for refusal to act on it."

The members presented Brainard and Deputy U.S. Trade Representative Demetrios Marantis with a litany of alleged Chinese transgressions, including filling made-in-California wine bottles with Chinese wine, using subsidies to ravage the U.S. solar industry, stealing U.S. software for products sold back to the United States, maneuvering to snatch U.S. electric car technology and underbidding U.S. competitors to win major contracts for a new bridge over San Francisco Bay.

"Why can't we get their attention? Why can't we start a fight?" asked Rep. Charles Rangel, D-N.Y.

"We share very much your sense of urgency," Brainard said, while reminding lawmakers that some progress is being made in righting the trade relationship.

The United States last year sold $92 billion worth of goods and services to China, making it the U.S.'s third biggest export market. Marantis said that since China joined the World Trade Organization in 2001, U.S. manufactured goods exported to China have quadrupled and agriculture exports are up 800 percent.

He said the Obama administration has also been aggressive in pursuing China's unfair practices, with 12 of the 14 WTO disputes initiated against China coming from the United States.

He said the United States has imposed duties on China to combat a surge of Chinese tire imports and the Commerce Department has issued 22 antidumping orders or Chinese products including steel, chemicals and textiles.

The administration has also gone to the WTO with a list of China's hidden subsidies, pressed China to abandon its "indigenous innovation" program that discriminates against foreign investors and gives preferences to Chinese firms in government procurement, and is pressing China on its restrictions on Internet information and the export of rare earth metals.