U.S. Sets New China Duties
Move Opens Door
For a Wide Array
Of Trade Complaints
By GREG HITT
March 31, 2007
WASHINGTON -- The Bush administration imposed new economic sanctions against China, a vivid reflection of the increasingly tough climate in the U.S. toward free trade -- particularly with Beijing.
The new duties apply narrowly to complaints that Chinese producers of glossy, high-quality paper used in books and magazines are unfairly subsidized by their government -- just $224 million of annual imports, or less than 1% of the total goods and services Americans buy each year from China.
Commerce Secretary Carlos Gutierrez announces that the Commerce Department will apply anti-subsidy laws to China.But the action is likely to have much wider ramifications. It opens the door to a potential rush of similar complaints by American manufacturers, from steel to plastics producers, that face stiff competition from the Chinese. And it signals, more broadly, an increasingly harder line on trade emerging both at the White House and in Congress.
John Engler, president of the National Association of Manufacturers, has long called on the Bush administration to take a tougher stance on trade and praised the decision for giving U.S. companies new "recourse" to blunt "China's distortions of trade."
The dollar slipped in the foreign-exchange market following the late-morning announcement, as currency traders showed nervousness about rising trade tensions -- particularly since China happens to hold a large quantity of U.S. currency, stocks and bonds.
The Chinese government sharply criticized the move in a rare public statement released by the Chinese Embassy in Washington. "The Chinese side will watch closely over the development and reserve all rights to safeguard its lawful rights and interests," it said. The statement added that the U.S. action was "unacceptable to the relevant industry in China" and had "hurt their feelings."
The Bush administration has sought curbs on Chinese imports before, slapping quotas on textiles when global limits expired a few years ago. In February, the administration filed a complaint at the World Trade Organization, alleging that Beijing's subsidies to Chinese companies is harmful to U.S. makers of a wide range of items, from computer products to steel.
But the new Commerce Department decision marks a significant new phase because it opens a way for a wide range of industries to file complaints against Chinese exporters.
The Commerce decision reverses a two-decade-old policy that prevented U.S. companies from seeking protection against unfair government subsidies of goods exported from "nonmarket" -- usually communist -- economies. The logic was that it was too difficult to calculate what was considered a government subsidy from a government-owned company's regular operating budget.
But in announcing the imposition of so-called countervailing duties, Commerce Secretary Carlos Gutierrez suggested Friday that China's rapidly changing economy justifies the shift. The secretary said the decision "does not signal any retreat from economic engagement" with Beijing but does underscore a new determination to ensure China plays fairly in the global market. "We will use every tool at our disposal to guarantee our workers and our companies have a level playing field," he said.
The action comes as the Bush administration and Congress -- now controlled by Democrats -- engage in a broader reassessment of free trade. A number of trade measures are stalled on Capitol Hill. Bush aides are currently negotiating with House Democratic leaders on ways to elevate the importance of environmental protections and labor rights, among other things, in U.S. trade policy.
China is a particular source of the unease, as America's bilateral trade deficit with the Asian giant reached $233 billion last year. Critics say U.S. companies are at a disadvantage against China over a range of issues including piracy of American intellectual property, an artificially low value of the yuan and government subsidies to export-minded Chinese companies.
Earlier this week, Senate Finance Committee Chairman Max Baucus (D., Mont.) held hearings intended to lay the groundwork for major legislation addressing complaints about China's currency and other matters. "The persistent inflexibility of China's exchange-rate regime has gone on too long," Mr. Baucus is expected to say in a high-profile speech this coming week on China. "That should change."
The Commerce action was triggered by a complaint filed in October by an Ohio-based company, NewPage Corp. The company alleged several Chinese competitors in the glossy-paper market benefited from government-backed tax breaks, debt forgiveness and low-cost loans. The company contended the subsidies fueled a wave of low-priced exports to the U.S. From 2005 to 2006, the Commerce Department said, imports of cheaply-priced paper from China increased more than 170%.
Commerce announced a preliminary determination to impose duties ranging from 10.9% to 20.35% on the paper products at issue in the case. The department also applied duties to imports from Indonesia and South Korea.
The U.S. will begin immediately collecting cash deposits from the importers. But the case still isn't over. Several procedural hurdles must still be cleared. The Commerce Department now enters a new stage of "investigation" and must make a "final determination" on duties. After that, the case goes to the independent International Trade Commission. If the ITC decides for the domestic industry, the case goes back to Commerce, which then issues formal orders imposing the duties. That action is expected to be concluded late this year. |
发表于 2007-3-31 09:47:35
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