Administration Paints Rosy Trade Picture For Congress

The Bush administration put a happy face on its international trade initiatives in its 2007 annual report to Congress on trade, despite a $711 billion trade deficit in goods and services. The annual report includes little discussion of import issues, while placing the major emphasis on working for greater overseas market access, free trade agreements and "tough enforcement" of trade rules and regulations.

In forwarding the lengthy report to Congress, US Trade Representative Susan C. Schwab said: "President Bush's accomplishments of opening markets at every opportunity have advanced the pro-growth benefits of free and fair trade. Through negotiations for reciprocal access bilaterally, regionally and multilaterally - and tough enforcement to ensure that our trading partners must keep their promises of open markets - the past seven years have reaped record exports, job creation, growth and productivity."

Textile interests in Washington reacted sharply to the report, saying that the administration's trade policies have emphasized "free, but not fair trade."

Cass Johnson, president, National Council of Textile Organizations (NCTO), said the administration "should no longer ignore the gravity of the import situation, which is costing thousands of US manufacturing jobs, including a drop of more than 100,000 jobs in the textile and apparel industries in 2007." While noting that the administration has been successful in addressing some of China's illegal subsidies, Johnson said there are "dozens and dozens and dozens of others that cannot be ignored." He added that as the administration places emphasis on negotiating and implementing free trade agreements, it must place much greater emphasis on enforcing existing trade agreements.

In the section dealing with China, the administration says progress toward a market economy in China slowed in 2006 and 2007, as some Chinese agencies government agencies and officials have "not yet fully embraced key World Trade Organization (WTO) principles."

Noting that the US/China relationship is rapidly emerging as one of the most important in the world, the report says the United States in 2007 worked to improve the "character and substance" of that relationship, combining direct negotiation and "vigorous pursuit of improvements and enforcement of obligations through the WTO." The report notes that the United States took enforcement actions at the WTO when dialogue had not resolved issues.

The report says China, prodded by the United States and other WTO members, has taken many important steps to reform its economy, and is making progress in implementing a set of sweeping reforms that require it to reduce tariffs, eliminate non-tariff barriers, and improve market access for goods and services imported from the United States and other WTO members.

Looking toward 2008, the administration said it will address the need to eliminate several prohibited subsidy programs that have been providing substantial benefits to a wide range of manufactured goods being sold in China and being exported to the United States.

In other areas of international trade, the report says bilaterally it will build on passage of the Peru Free Trade Agreement (FTA) by working with Congress to advance the pending FTAs with Colombia, Panama and South Korea. "These pending agreements," the report says, "offer substantial opportunities for US farmers, ranchers, workers, manufacturers and producers."

Multilaterally, the administration says it will continue to pursue an ambitious Doha Round of trade liberalization negotiations, adding that a successful Doha Round is President Bush's "top priority."

In a statement sent with the report to Congress, Schwab said: "In 2008 the administration will continue its efforts to build and strengthen trade relations worldwide, while ensuring that all parties involved abide by fair and evenly applied rules. In particular, the administration will pursue Asia-Pacific regional economic integration through the Asia Pacific Economic Cooperation Forum."

March 11, 2008