- The Washington Times - Friday, November 12, 2004


The Bush administration yesterday rejected a request from 30 members of Congress that it bring a World Trade Organization case against China charging the Asian nation with manipulating its currency to gain unfair trade advantages against the United States.

The congressional group urged the administration to file a case under Section 301 of U.S. trade law, which would have allowed the United States to impose penalties against Chinese goods if the World Trade Organization had ruled that China was violating global trade rules and China refused to change its currency practices.

In a statement, Neena Morjani, a spokeswoman for U.S. Trade Representative Robert B. Zoellick, said the administration believed pursuing such a case would undermine diplomatic efforts the administration is pursuing to get China to change its currency policies.

“A Section 301 action would not assist in these efforts and indeed could be more damaging than helpful at this time,” she said.

Sen. Charles E. Schumer, New York Democrat, and Rep. Sander M. Levin, Michigan Democrat, who were leading the congressional effort to bring pressure on China over its currency practices, were disappointed with the administration’s decision.

In a letter to President Bush, they said the administration was “failing America’s workers, farmers and businesses on what is perhaps the single most important unfair trade practice affecting the United States today.”

The members of Congress petitioned the administration in late September to bring a currency case against China.

They raised many of the same arguments that a group of unions and manufacturing companies had made in a petition they had filed earlier in the month in an effort to pressure the administration on a high-profile trade issue in the closing weeks of a presidential campaign. The administration also rejected the industry petition.

U.S. manufacturers contend that China’s practice of pegging its currency, the yuan, to the U.S. dollar at a fixed rate has led the Chinese currency to be undervalued by as much as 40 percent, giving Chinese products a tremendous competitive advantage over U.S. products.

The administration has been lobbying China to change its currency practices, but Chinese officials say they cannot allow the value of China’s currency to be set in currency markets until they have made reforms in the country’s banking and financial systems.

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