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Republicans offer china restrictions to push cafta Original Source Link: (May no longer be active)
http://today.reuters.com/news/newsArticle.aspx?type=politicsNews&storyID=2005-07-14T224245Z_01_N145204_RTRIDST_0_POLITICS-TRADE-CHINA-CONGRESS-DC.XMLhttp://today.reuters.com/news/newsArticle.aspx?type=politicsNews&storyID=2005-07-14T224245Z_01_N145204_RTRIDST_0_POLITICS-TRADE-CHINA-CONGRESS-DC.XML
Republicans offer China bill to help CAFTA odds
Thu Jul 14, 2005 6:42 PM ET
By Doug Palmer
WASHINGTON (Reuters) - Republican lawmakers unveiled legislation on Thursday aimed at addressing China trade concerns that have complicated passage of a controversial free trade agreement with Central America.
The bill, for the first time, would allow U.S. companies to seek duties against "subsidized" imports from China.
It also would require the Treasury Department to fine-tune its definition of currency manipulation, essentially making it more difficult for the Bush administration to avoid labeling China's currency policy as an example of that.
Treasury angered many lawmakers in May when it stopped short of formally calling China a currency manipulator. Taking that step would open the door to retaliatory action, within the bounds of international trade rules, if negotiations to change China's currency policy were unsuccessful.
House Ways and Means Committee Chairman Bill Thomas, a California Republican, called the bill a "strong and responsible" piece of legislation that would address concerns about China without violating World Trade Organization (WTO) rules.
Rep. Phil English, a Pennsylvania Republican, said the bill satisfactorily addressed concerns about "the biggest trade issue that America is facing" and that he was now able to support the U.S.-Central American Free Trade Agreement, or CAFTA, which faces a fierce fight in the House this month.
The U.S. trade deficit with China could surpass $200 billion this year after hitting a record $162 billion in 2004. The overall U.S. trade gap is also on track to surpass last year's record of $618 billion.
Fears in Congress about China and the overall trade imbalance have added to the administration's difficulty in winning approval of CAFTA, which would tear down trade barriers between the United States, Costa Rica, Honduras, Guatemala, El Salvador, Nicaragua and the Dominican Republic.
"I would expect at least five or six people currently opposed to CAFTA would rethink their position and come across" as a result of the China bill, English said.
Republicans remain short of the 218 votes need for approval in the House. The Senate approved CAFTA last month 54-45.
Senior House Democrats offered their own China bill, which also would allow companies to seek countervailing duties against subsidized Chinese imports, but goes further than the Thomas-English bill on the currency issue.
Many lawmakers blame much of the bilateral trade deficit on China pegging its currency at a low value against the dollar.
The Bush administration has repeatedly resisted calls to challenge the practice at the WTO, but has urged China to move to a more flexible exchange rate.
The Democrats' bill would tighten the U.S. government's definition of currency manipulation and require the White House to file a WTO complaint against China for that within 90 days.
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