Democratic Leader Blasts Administration Policy

By James A. Morrissey, Washington Correspondent

The chairman of the House Ways and Means Committee’s Trade Subcommittee has sharply criticized the Bush administration’s trade policies with China and says changes will have to take place.

At a Ways and Means Committee meeting August 2, Rep. Sander Levin, D-Mich., said the administration has failed to deal with “China’s trade distorting policies that have led to a major imbalance in trade.” He said that China, because of its size, human resources and its “major combination of individual enterprise and government involvement in the economy,” has become a major force in the global economy that has resulted in changes “more profound than we expected.”

Levin charged that the administration has failed effectively to use the special safeguard mechanism Congress included in legislation granting permanent normal trade relations status to China. He also said the administration has been unwilling to use the World Trade Organization’s dispute resolution mechanism despite repeated requests from members of Congress that it do so.

He singled out the administration’s go-slow approach to resolving the Chinese currency manipulation issue as a failure because Treasury department officials are relying on technicalities to avoid branding China a currency manipulator. He concluded his statement by saying, “For years there has been a hands off approach to trade policy while some of our trading partners have taken a gloves off approach.”

Testifying at the same hearing, Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, said, “China’s predatory trade practices are crippling US manufacturing, and hopefully this hearing is an indication that Congress intends to take prompt action this fall against those policies.” He called for congressional enactment of legislation to combat currency manipulation and a measure to offset what he said is a trade disadvantage to US manufacturers and service providers caused by the imposition and rebating of foreign border adjustment taxes, mostly in the form of value-added taxes.