Protecting Americas Defenders China Trade: Actions Speak Louder Than Words by Willam R. Hawkins (NAPSA)—Attention has focused on China's currency manipulation as a key factor in America's manufacturing recession, high unemployment and worsening trade deficit. Governmentofficials have encountered a wave of public concern whenever they have ventured outside the Beltway, which is also reflected in hearings and petitions in the Congress. It is time to move from talk to action. Beijing’s response Hawkins —_—_——_ to rising complaints about its behavior does not give much hope that talk alone will change anything. Commerce Minister Lu Fuyuan told a recent meeting of Asian and European trade ministers that China’s exchange policy will be “determined first and foremost based on China’s own domestic economic needs.” U.S. trade policy should also be based on the needsof its domestic economy. Several industries have filed individual anti-dumping actions against China with the International Trade Commission, but the problem is systemic and requires a comprehensive response by the United States on a government-to-government basis. Washington should use the special provisions which were negotiated as a condition of Beijing's accession to the World Trade Organization. These provisions allow the United States to impose temporary tariffs and quotas to protect American industries from sudden surges in Chinese imports. Countervailing duties to offset China's artificially undervalued currency should be imposed without delay. Action on the currency issue will give U.S. diplomacy credibility on a variety of other pending trade issues. Chinais still a nonmarket economy, under a oneparty dictatorship. Its government directs the allocation of scarce inputs, state-owned enterprises are heavily subsidized and protected, and the private sector only employs one-fourth of the urban work force. Beijing’s doctrine is managed trade, not free trade. Currency manipulation is only one tactic it uses. American policy must meet any challengeto its prosperity and security with determination, from whatever direction it comes. William R. Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council, Washington, D.C.
