FOR IMMEDIATE RELEASE July 14, 2005

CONTACT: Brendan Daly/Jennifer Crider 202-226-7616

House Democrats Introduce Legislation to Address China’s Unfair Trade Practices

Washington, D.C. – House Democratic Leader Nancy Pelosi and Congressman Charles Rangel of New York, Ranking Democrat on the House Ways and Means Committee, today introduced legislation to address the most urgent problems in the U.S. trade relationship with China -- the country with which the United States has the largest trade deficit.   They were joined by Democratic Whip Steny Hoyer, Caucus Chairman Robert Menendez, Caucus Vice-Chairman James Clyburn, as well as Trade Subcommittee Ranking Member Benjamin Cardin and former Trade Subcommittee Ranking Member Sander Levin.

The introduction of the bill follows the announcement yesterday by the Commerce Department that the U.S. trade deficit with China reached $15.8 billion in May, the highest this year and third-highest on record. 

“The unrelenting, sky-high trade deficits with China reflect a failure by the Bush Administration to adopt trade policies that promote the interests of U.S. workers, businesses and farmers,” said Rep. Rangel.  “We can’t keep whistling into the wind and ignoring these deficits.  They are undermining our economy and causing hard-working Americans to lose jobs.”

The trade deficit with China could hit at least $174 billion this year, significantly higher than last year’s record $162 billion deficit.  Earlier this week, Commerce Secretary Carlos Gutierrez and U.S. Trade Representative Rob Portman traveled to China for talks with their Chinese counterparts.  The discussions were the latest in a long series of talks between the Administration and China -- each of which has ended with more promises from the Chinese government, but no action.

“Time is up, and the Bush Administration’s China trade policy has flunked every test," Rangel said.  "The growth in China’s economy is one of the most important and predictable developments of the 21st century and yet the Bush Administration is like a deer caught in the headlights.  Since the President has no viable policy for dealing with trade with China, Congress must step in on behalf of America’s working families and small businesses." 

The Fair Trade with China Act of 2005 (FTCA) addresses the four most urgent problems in the U.S.-China trade relationship by:

(1)        clarifying U.S. countervailing duty law to allow U.S. workers and businesses to challenge Chinese subsidies to manufactured and agricultural exports, and directing the U.S. International Trade Commission to collect data on the scope of these subsidies;

(2)        amending U.S. trade law to make clear that currency manipulation is a harmful and unjustifiable practice, directing the Office of the U.S. Trade Representative to file a case in the World Trade Organization within 90 days to challenge China’s currency manipulation, and clarifying the definition the Department of Treasury uses to determine whether countries are engaging in currency manipulation;

(3)        strengthening the special China safeguard law, which the Bush Administration has refused to apply, and which is intended to provide a remedy to American industries from export surges caused by China’s nonmarket economy, and amending customs provisions to ensure the collection of duties owed on imports from China; and

(4)        reviving the “Super 301" provisions of U.S. law to direct USTR to identify the priority barriers to U.S. exports of goods and services and China’s unfair trade practices, including China’s failure to protect intellectual property rights and other unfair trade practices. 

All of the actions called for in the legislation are fully consistent with World Trade Organization rules.

“ Democrats are united in presenting a New Direction for America, one that will make our nation as strong as its people, one that brings opportunity, security, and prosperity to all Americans. ”

Democratic Leader Nancy Pelosi