U.S. READIES SANCTIONS AGAINST CHINA

[Anonymous]

U.S. Readies Sanctions Against China
WASHINGTON
(APRIL 07) – The Bush administration, facing increasing anger over
soaring trade deficits, says it will impose sanctions against Chinese
paper imports, which would open a new avenue for beleaguered American
manufacturers to seek government protection.The action, announced
Friday by Commerce Secretary Carlos Gutierrez, reverses 23 years of
U.S. trade policy by treating China, which is classified as a nonmarket
economy, in the same way other U.S. trading partners are treated in
disputes involving government subsidies.The decision involved a case
brought by NewPage Corp., a paper company. It contended that its coated
paper, used in printing glossy catalogues and annual reports, was
facing unfair competition from imports from Chinese companies that
receive improper subsidies from the Chinese government.Commerce imposed
penalty tariffs ranging from 10.9 percent to 20.4 percent on imports of
glossy paper from China. The tariffs will take effect next week on a
preliminary basis and will become final after a further Commerce review
is completed in June.The action was being watched closely by many other
American companies, from steel to furniture, that were battered in
recent years as Chinese imports flooded the United States.U.S.
companies always have been allowed to file antidumping cases to seek
penalty tariffs on grounds that the Chinese products were being sold in
the United States below cost.With Friday’s action, however, they also
will be able to seek penalty tariffs, known as countervailing duties,
on the basis of improper government subsidies such as favorable loans
from state-owned Chinese banks to direct government support.”The United
States today is demonstrating its continued commitment to leveling the
playing field for American manufacturers, workers and farmers,”
Gutierrez said in announcing the decision.

The Chinese government criticized the administration decision.
“This
action of the U.S. side goes against the consensus reached by the
leaders of both countries to resolve disputes through dialogue,” said
Wang Zinpei, a spokesman for China’s Ministry of Commerce, quoted by
the Xinhua News Agency. “China strongly requires the U.S. side to
reconsider the decision and make prompt changes.”Daniel Porter, a
Washington attorney representing the Chinese government, said no
decision had been made yet whether to appeal a federal court ruling on
Thursday that gave the Commerce Department the go-ahead to invoke the
sanctions.The decision by Commerce represented the latest effort by the
administration to adopt a tougher approach to Chinese trade practices
as the administration faces growing pressure from Democrats, who now
control both the House of Representatives and the Senate.The
administration filed a case against China with the World Trade
Organization this year alleging that China was violating WTO rules by
giving its companies improper subsidies for production of steel, paper
and other products.

U.S. lawmakers, businesses and unions praised the action in the NewPage case.
In
a joint statement, House Ways and Means Committee Chairman Charles
Rangel and Rep. Sander Levin, both Democrats, called the sanctions a
“long-overdue change in policy.” They said they intended to push
forward with legislation that would explicitly change U.S. law to make
sure the Commerce actions will withstand any court challenges.Leo
Gerard, president of the United Steel Workers union, said the Commerce
action was welcome news for workers at 22 paper mills in 13 states who
produce the glossy paper covered by the sanctions. Gerard’s union
represents 90 percent of the work force in the U.S. coated paper
industrGilbert Kaplan, a Washington attorney representing NewPage, said
the Commerce action reflected the reality that China, as a major power
in the global economy, “should not be exempt from the laws that ensure
fair trade.”When the Bush administration made it known last year that
it was willing to consider cases against China involving government
subsidies, it was seen as an effort to bring more pressure to bear on
the Chinese to adhere to the rules of the WTO, which China joined in
2001.Treasury Secretary Henry Paulson is leading an effort to pressure
China to let its currency rise in value against the dollar. American
manufacturers contend that China keeps its currency devalued by as much
as 40 percent to give the country unfair trade advantages.

[Author]

April 2, 2007 at 10:07 AM