Mon, May 30, 2005 - Page 9 News List

The trade party is all but over for the Chinese


The mammoth US trade deficit with China and Beijing's apparent intransigence in curbing it are ratcheting up the rhetoric in Washington as lawmakers urge US President George W. Bush to get tough.

Calls for action include dragging China before the WTO and pressure for Beijing to revalue the yuan, which US manufacturers claim is making Chinese exports unfairly cheap.

"We need to be aggressive," Republican Senator Lindsey Graham said.

"We need to push on all fronts: Transshipment, pegging their currency, intellectual property theft. We need to hit them hard and hit them across the board," he said.

The US trade gap with China was US$162 billion last year, more than the entire deficit just a few years ago.


Graham last week proposed a Senate resolution that would urge the US Trade Representative to "immediately initiate a case" against China through the WTO's dispute settlement process for allegedly not doing enough to combat intellectual property rights infringements.

The lawmaker, who says that "intellectual property theft is rampant in China," believes an "overwhelming" majority of lawmakers would support the measure and said he hopes for a vote soon.

Should the Senate go on the record on China's trade abuses, Graham believes that the "Chinese will understand that if they want to be a member of the family of nations, they need to play by the rules."

Democratic Senator Byron Dorgan, who is co-sponsoring the resolution, also put some blame on the Bush administration. Asked what the White House could do to reduce last year's record US$617 billion trade deficit, the lawmaker said that the administration "needs to get a backbone."

Last month, the administration raised China to its Priority Watch List "for failure to effectively protect intellectual property rights and to meet its commitment to significantly reduce infringement levels, despite efforts by China's senior leadership to do so."


Dorgan said the White House needs to demand that the trade relationship with China is mutually beneficial. He believes that it is currently "hugely beneficial for China" and "very negative for our country."

Robert Portman, the new US Trade Representative, appears to be an ally of those who want to take a tougher stance on China's trade policies.

During his confirmation process, Portman said China often breaks trade rules and the first thing he would do in his new post would be to order a "top-to-bottom review of all of our trade issues with China." Portman took the oath of office late last month.

"I think we need a tougher approach," Portman said during his Senate confirmation.

"I think we need to hold China to this WTO commitment," he said.

Critics' concerns go beyond copyright breaches. They also say China should revalue its currency and prevent the counterfeiting of goods.

China is also accused of illegally subsidizing some of its industries, such as its textile manufacturers, and US unions and some lawmakers are highly critical of China's labor and environmental policies. The US recently raised trade barriers for some Chinese textiles after an international quota system expired in January, and opened the market to a flood of Chinese-produced goods.

Though China is a key US trading partner, it is also a diplomatic ally in the Bush administration's efforts to deal with North Korea and its nuclear weapons.

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