WASHINGTON — Sens. Lindsey Graham (R., S.C.) and Byron Dorgan (D., N.D.) introduced a bill Thursday that would revoke the trade status that makes China eligible for low tariff rates on U.S. imports.
The Graham-Dorgan bill is widely seen as a symbolic political statement and its passage in the Senate and House is unlikely. Still, the senators said the bill would provide more leverage to force China to end unfair trade practices, including currency manipulation, subsidized exports and intellectual property rights violations.
“You’ve got to put bills into the hopper like we did today that will let China know that Congress has just about had it and the tipping point has been reached,” Graham said during a news conference.
The bill would strip away the Permanent Normal Trade Relations designation given to all U.S. trading partners that are members of the World Trade Organization and require Congress to renew normal trade relations status on an annual basis. China could theoretically face much higher tariffs on its exports to the U.S. if Congress ever voted against renewing it.
Pointing to the annual trade deficit — the foreign trade report set for release today is likely to show a total 2005 shortfall of $700 billion to $750 billion — Dorgan said: “This is unsustainable….There is nothing normal about this at all. There is nothing normal about a trade relationship that causes these kinds of deficits.”
Dorgan noted that the Commerce Department’s trade report also is expected to show that the deficit with China topped $200 billion in 2005. The trade shortfall with China was $83 billion in 2000, the year Congress approved the lower tariff status, which was a prerequisite for China joining the WTO, he noted.
“Every year has gotten worse and not better,” said Graham. “The deficit has gotten worse…human rights practices have gotten worse, [China’s] manipulation of currency remains static and intellection property theft has gotten worse.”
U.S. Trade Representative Rob Portman told reporters Thursday that stripping China of PNTR would “do nothing to help our trade deficit. In fact, it could hurt” political and commercial relations with China.
Graham also said he and Sen. Charles Schumer (D., N.Y.) are planning a trip to China in March to meet with political and business leaders. Graham and Schumer have broad, bipartisan support in the Senate for a bill they introduced last year that would impose a 27.5 percent tariff on all imports from China if it does not revalue its currency within a set time frame.
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Senate leaders have delayed a full floor vote on the bill twice, but it is slated to come up for balloting at the end of March.
“I think it would be wise to go and talk to [the Chinese] and see if there is any hope for improvement on the currency issue,” Graham said. “I don’t know how much more reasonable we can be. We’ve been doing this for a year-and-a-half and everybody tells us to wait, and we’ve been incredibly patient.”
Asked whether the U.S.-Chinese import restraint agreement that went into effect last month, restricting $6 billion in Chinese apparel and textile entering the U.S., was mitigating the impact of imports on the domestic textile industry, Graham said: “Somewhat, but textiles is just a small part of the puzzle.” He stressed that “Band-Aid” measures are not the solution.