WASHINGTON — The Bush administration welcomes a House bill if it meets certain criteria in imposing countervailing duties on unfairly subsidized imports from nonmarket economies like China, a top Commerce Department official said Thursday.
David Spooner, assistant secretary of commerce for import administration, said in testimony before the House Ways and Means trade subcommittee that the proposed bill “affirms” the department’s authority to level such duties.
The Department of Commerce has not applied the countervailing duty law to nonmarket countries since 1984. But China’s entry into the World Trade Organization and its growing trade deficit with the U.S., which hit $232.5 billion last year, has prompted calls from all corners of Capitol Hill to give domestic manufacturers more remedies against imports produced by companies unfairly subsidized by their governments.
If the House and Senate pass the bill, introduced by Reps. Phil English (R., Pa.) and Arthur Davis (D., Ala.), and it is signed into law, U.S. companies could file subsidy cases against countries such as China and Vietnam.
But Spooner warned against making too many changes to the authority of the Department of Commerce.
“Commerce has always maintained, and we believe the courts have agreed with us, that we have the statutory authority to apply the CVD [countervailing duty law] to [nonmarket economies],” he said. “However, if Congress would like to affirm Commerce’s authority as proposed [in the bill], we would welcome the opportunity.”
Spooner said there is “no legal bar to Commerce’s application of CVD law to nonmarket economies” and it will do so in cases where it is warranted.
Retailers are wary of the legislation and the potential for a flood of filings of subsidy cases by the domestic industry, which could essentially lead to tariffs on their imports. Domestic textile producers support legislation that could potentially give them more tools to fend against unfairly subsidized imports from China and restrain the country’s import growth.
Rep. Sander Levin (D., Mich.), chairman of the House trade subcommittee, said it is “unassailable” that China subsidizes its textile, steel, petrochemical, machinery and several other industries.
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“Unlike some previous proposals, [the English-Davis bill] is not part of a strategy to shore up support for other legislation,” Levin said. “Instead, it stands on its own merits. It doesn’t seek to ‘bash’ our trading partners, but to apply the same rules to them as to everyone else — balanced rules that provide for effective competition.”
Spooner told reporters after the hearing that his agency still has some concerns about the way the bill is written and would seek to work with the House committee to revise some of the language, although he did not give details.
“We would want to make sure that the bill doesn’t cut down on our discretion to craft what we think is an appropriate methodology,” Spooner said.
Commerce is considering a case involving imports of coated paper from China — widely seen as a test case for applying countervailing duties against nonmarket economies — and will make a preliminary decision by April 2.