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Washington Outlook Archive

US Government Rejects Petition On China Trade

James A. Morrissey, Washington Correspondent

The Bush administration has denied a petition by the American Federation of Labor - Congress of Industrial Organizations (AFL-CIO) to invoke trade sanctions against China, and in the process poured cold water on a similar petition that a number of manufacturing industries, including textiles, were planning to file. Last month, the AFL-CIO filed a petition under Section 301 of the Trade Act of 1974, which permits the US government to invoke trade sanctions against countries that it believes are engaged in unfair international trade practices. The labor union charged that China is guilty of unfair trade practices because of its labor rights abuses. A coalition of manufacturing industries, known as the Fair Currency Alliance, was preparing a Section 301 petition based on China's alleged manipulation of its currency, which industry officials claim amounts to as much as a 40 percent subsidy for Chinese exports to the United States.

Appearing at a news conference, four Bush administration cabinet officials said they cannot support invoking punitive tariffs on Chinese imports and suggested other approaches to solving the problems. US Trade Representative Robert B. Zoellick said accepting the petitions would take us down the path to economic isolationism. Instead, he said the United States is engaged with China on a number of trade reform issues and that progress in a number of areas had been made during recent meetings between US and Chinese trade officials. Commerce Secretary Donald L. Evans said China will be required to reform its labor standards and currency policies before it can be granted market economy status under US trade laws.

Cass Johnson, president of the National Council of Textile Organizations, which is a member of the Fair Currency Alliance, expressed bitter disappointment at the administrations rejection of the petitions and the tone of the rhetoric the trade officials used in rejecting them. He said the way the issue was handled and the comments of administration officials indicates they are committed to doing anything about the problems manufacturing industries are having with China.

May 2004