Key members of the House of Representatives are supporting legislation that would crack down on
what they see as illegal trade practices by China in an effort to win congressional support for the
Dominican Republic-Central American Free Trade Agreement (DR-CAFTA). The legislation for the first
time would permit the United States to levy punitive import duties on illegally subsidized goods
from state economies such as China. It also would punish countries that manipulate their currencies
to gain an international trade advantage.
Rep. Phil English (R-Calif.) is sponsoring the legislation, and he received the blessing of
Rep. Bill Thomas (R-Calif.) chairman of the House Ways and Means committee. Up until this time,
Thomas has been opposed to the anti-China legislation, but he said the English bill is strong and
responsible legislation. Earlier this month, the Senate passed DR-CAFTA by a vote of 54-45, but the
outlook in the House is uncertain, as there is strong Democratic opposition and lack of support
from some Republicans, including a number of textile-state representatives who have either
announced their opposition or are non-commital. On July 16, President Bush flew to North Carolina
to drum up support in the textile states. He said DR-CAFTA is a pro jobs bill that would help
stabilize the economies of the Central American states and create trade opportunities.
Rep. Charles B. Rangel (D-NY), a powerful Democratic representative on the Ways and Means
Committee, also has introduced a bill calling for countervailing duties on goods from state-run
economies and punitive action against currency manipulation. The Democrat bill goes ever further
than the Republican bill in that it would tighten the definition of currency manipulation and
require the president to file a complaint with the World Trade Organization within 90 days of a
determination of manipulation.
Textile industry lobbyists have long sought the ability to file countervailing duty cases
against state-run economies such as China, and have been calling on the US government to take
action against Chinas currency manipulation, which they say amounts to as much as a 40-percent
subsidy on imports.Rep. Thomas said he would like to see the punitive legislation acted on before
the House considers DR-CAFTA later this month,
July 2005
