Politics, and China policy, liven up hearing on
U.S. trade
Elizabeth Becker NYT
, March 10, 2004
WASHINGTON With trade looming as an important issue in the presidential
campaign, the normally staid annual Senate hearing on trade policy was turned into a
political forum, with Democrats pushing issues supported by their presumptive
nominee, Senator John Kerry of Massachusetts, and Republicans pleading for
strong ammunition for their side.
But the biggest sign offered by the Bush administration about getting tough on trade
was the possibility of suing China at the World Trade Organization because of its tax
on imported semiconductors, an issue that has not captured the political imagination.
Senator Olympia Snowe, Republican of Maine, brought up China, a country she
said was taking jobs and companies away from the United States in violation of
international trading rules.
"At what point are we going to be aggressive?" she asked.
Robert Zoellick, the U.S. trade representative, said the administration was
considering bringing its first case against China at the WTO, adding that it "could be
soon." But the WTO case would not center on forcing China to allow its currency to
float. Snow and many other members of Congress think China's fixed exchange rate
undercuts the U.S. economy.
Rather than take on that issue, which has led to fiery debates on Capitol Hill,
Zoellick said the United States would take China to the WTO because of its tax on
semiconductors, which is as much as 14 percent higher on imported computer chips
than on those designed or manufactured in China, whether by domestic or foreign
companies.
Senator Bob Graham, Democrat of Florida, gave the government a grade of "D," on
average, for what he called its poor efforts to keep the United States competitive in
the global economy.
Senator Blanche Lincoln, Democrat of Arkansas, who is normally worried about
finding foreign markets for her state's rice and cotton crops, raised her party's
standard complaint that the administration has to improve labor and environmental
standards worldwide.
Senator Charles Grassley of Iowa, the Republican chairman of the Finance
Committee, said he was frustrated that Kerry made "strong comments" about jobs
lost to outsourcing overseas and asked Zoellick to come up with good answers for a
rebuttal.
"I don't have a single town meeting where something isn't brought up about
outsourcing," Grassley said.
Zoellick ducked the question, proving he had learned a lesson from N. Gregory
Mankiw, chairman of the president's Council of Economic Advisers, who touched
off a firestorm last month by saying losing jobs to outsourcing would work out in
the end.
Choosing his words carefully, Zoellick said trade "involves change, and that can
mean difficulties for people."
Outsourcing was judged neither good nor bad.
"It's a question of dealing with families and anxiety," Zoellick said. "But I think the
challenge is: How do you help people in a way that doesn't hurt or kill other jobs?"
Retraining programs, improved education and portable pensions were among
Zoellick's proposed solutions.
It was in response to some of those ideas that Graham gave the federal government,
and the administration, the average grade of "D," particularly for starving state
governments of money they need to finance education.
In his prepared testimony, Zoellick made the familiar case that free trade benefits
American workers.
"Americans can compete with anybody - and succeed - when we have a fair chance
to compete," he said. "Our goal is to open new markets and enforce existing
agreements so that businesses, workers and farmers can sell their goods and
services around the world and consumers have good choices at lower prices."
But the Republican members of the panel asked Zoellick for proof that the
administration could beat back Democrats on trade, picking some of the hottest
issues: the trade deficit and China.
Senator Craig Thomas, Republican of Wyoming, asked whether the country's
record-high trade deficit would continue climbing.
Zoellick said there were other things to worry about and found a way to put the $489
billion trade deficit for 2003 in a positive light.
"If you go back and look at the '30s, at the time of the Great Depression, we had a
trade surplus," Zoellick said. "So the surplus or deficit numbers, while they are
indicators, I'm not sure should be the prime goal."
The New York Times
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