WASHINGTON — Amid a threat to hold up his appointment, President Bush’s nominee for U.S. Trade Representative, Rep. Rob Portman (R., Ohio), said at his Senate confirmation hearing Thursday that he would play hardball with China by more aggressively enforcing trade agreements to protect U.S. jobs.
As members of the Senate Finance Committee questioned Portman, Sen. Evan Bayh (D., Ind.) said he would seek to block a full Senate vote on the nomination until the Senate agrees to take up a bill he has cosponsored that would penalize China and other nonmarket economies for subsidizing exports.
Senate Democrats are challenging the Bush administration’s trade policies toward China as that nation’s imports to the U.S. have soared with the end of international apparel and textile quotas and the overall U.S. trade deficit last year reached a record $617 billion.
Portman told the committee he would order “an immediate top-to-bottom review” of complaints about China’s trade practices and meet with Chinese officials “to demonstrate the urgency of resolving the problems” and “deliver a strong message” to them.
“I think we need a tougher approach,” Portman said. “Last year, exports to China increased 22 percent, but that was overwhelmed by imports from China. The fact is some imports came in because the Chinese are not adhering to their obligations under the WTO and the fact is we need to do a better job enforcing our trade laws.”
Portman cited a powerful tool the U.S. can use to enforce trade laws: imposing three safeguard quotas on $624.5 million worth of imported goods. The administration has undertaken a review to determine if the safeguards are warranted. In addition, seven safeguard petitions have been filed by domestic textile and fiber groups seeking quotas on $1.45 billion worth of textile and apparel shipments from China.
“That is part of how we need to deal with China,” he said.
The U.S. needs to hold China to its WTO commitments, Portman said, and change its policy of valuing its currency at a fixed exchange rate to the dollar, which experts say makes it undervalued and places U.S. manufacturers at a disadvantage, as well as strengthening intellectual property rights enforcement and opening up distribution and services.
Sen. Blanche Lincoln (D., Ark.) asked why the U.S. doesn’t allow American companies to file unfair trade practice complaints against nonmarket economies under the countervailing duty laws.
“My understanding is we probably could,” Portman said, but he warned the downside is it could be challenged at the WTO because it is difficult to identify such subsidies. “I don’t think China deserves market-economy status right now because they have not met benchmarks, including currency. So I think we need to be careful how we proceed.”
Sen. Chuck Grassley (D., Iowa), chairman of the finance committee, said he plans to bring the nomination to the Senate floor on Tuesday.