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U.S. Files Trade Complaint Against China
WASHINGTON
(Feb.07) – The Bush administration, under pressure from a
Democratic-controlled Congress to do something about America’s soaring
trade deficit, filed a trade case Friday against China in a dispute
involving government subsidies.The complaint filed with the World Trade
Organization in Geneva alleges that China is using government support
and tax policies to bolster Chinese firms in competition against U.S.
and other foreign firms.”We are seeking to level the playing field to
allow U.S. manufacturers to compete fairly with Chinese firms,” U.S.
Trade Representative Susan Schwab said in announcing the case.The
action will trigger a consultation during which trade negotiators will
try to resolve the dispute. If that fails, a WTO hearing panel will be
convened to handle the dispute.A win by the administration would clear
the way for the United States to impose economic sanctions against
China if Beijing still refuses to change its subsidy program.Schwab’s
announcement that a case was being filed came just two days after
Treasury Secretary Henry Paulson faced stiff questioning before a
congressional panel, where both Democrats and Republicans accusing the
administration of doing too little to deal with a swelling trade
deficit with China.The case against China on subsidies is the second
WTO case the administration has filed in the past year. Last March, it
filed a case accusing China of using a WTO-illegal tax system to block
imports of U.S. and other foreign-made auto parts into China.Paulson
told the Senate Banking Committee on Wednesday that he believed a
high-level dialogue that was begun last December with top Chinese
officials offered the best approach to dealing with America’s trade
problems with China.The administration has been trying to get China to
allow its currency to rise in value against the dollar.U.S.
manufacturers contend that the Chinese currency, the yuan, is
undervalued by as much as 40 percent, giving Chinese products a huge
competitive advantage against American goods.
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