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House okays bill aimed at subsidized China goods

(Agencies)
Updated: 2005-07-28 06:49

The U.S. House of Representatives voted 255-168 on Wednesday to give U.S. manufacturers a new defense against subsidized imports from China, but the bill faced an uncertain fate in the Senate.

The U.S. Trade Rights Enforcement Act also would require the Treasury Department to report every six months on the impact of recent changes China made to its currency policy in an attempt to keep up pressure on that front.

Republican leaders backed the bill to persuade trade-wary party members from industrial states like Ohio or Michigan to vote for the U.S.-Central American Free Trade Agreement, or CAFTA, also expected to come up for a vote on Wednesday.

It would allow U.S. companies to seek duties against subsidized imports from China and other non-market economies. That is a priority for many U.S. manufacturers who say they are being driven out of business by unfair Chinese trade practices.

But the Bush administration has been cool to the idea because the Chinese government involvement in the economy is so prevalent it is difficult to determine what subsidies companies have received. In addition, U.S. firms can already seek duties on "dumped" Chinese goods sold below fair-market value.

Many House Democrats belittled the bill as a cosmetic measure to round up votes for CAFTA.

They said certain provisions would actually weaken the ability of companies to use U.S. trade laws against subsidized imports instead of strengthening it.

"I think it's an inconsequential bill. ... It will certainly not hold China accountable," said Rep. Ben Cardin, a Maryland Democrat. "It will not help companies that are hurt by (imports of) subsidized manufactured products."

Republicans accused Democrats of playing politics on the issue and attempting to scuttle the CAFTA vote by blocking efforts to approve the trade rights bill on Tuesday.

"This is very much a mainstream initiative that is designed to show the strongest possible support in this chamber for challenging China on its mercantilist trade policies," said Rep. Phil English, a Pennsylvania Republican who is backing CAFTA after House leaders embraced his trade legislation.

Senate Democratic Leader Harry Reid called the House bill a "sham" because it was unlikely to become law. "There is little prospect that the legislation will move anywhere in the Senate," Reid said.

The bill also puts pressure on the Bush administration to bring a World Trade Organization case if Beijing does not crack down on piracy and counterfeiting of American products or open its market to more U.S. goods and services.

Other sections urge the U.S. Trade Representative's office to appoint a chief trade law enforcement officer and insist that any new world trade pact preserve the United States' right to take action against subsidized or dumped imports.