Progress on China — and CAFTA

By July 19, 2005General

Last Friday, House Ways & Means Committee Chairman Bill Thomas (R-CA) and Phil English (R-PA) introduced the Trade Rights Enforcement Act, to strengthen the hand of US trade enforcement against illegal trade practices.

Under the World Trade Organization rules (WTO), if a country is found to have illegal subsides, they can be slapped with countervailing duties of an equal amount. When China joined the WTO, it agreed to abide by these provisions. However, the U.S. Commerce Department has not used these provisions against “non-market” economies like China. What the English bill does is clarify that this provision can be used against non-market economies.

The NAM has been on the forefront of efforts to stop China’s currency manipulation and to insist on their compliance with the full array of WTO rules. This includes an end to illegal subsides and a fundamental respect for intellectual property. This bill will put more teeth in the US enforcement mechanism and we support it.

Also, since apparently some members of Congress see trade as a monolith, movement on China should help move CAFTA along as well. CAFTA is a completely different issue, in that the day it takes effect, duties on almost all US products going into the CAFTA countries will be lifted, further expanding what is already the 10th largest export market for US goods. No matter, if folks need a little more comfort on China to move forward on CAFTA, so be it.

Thanks to Rep. English and Rep. Thomas for their leadership on this most important issue. Here’s a link to our press release on the topic.