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U.S.-China Trade Talks Fuel Debate On Enforcing Rules

Tuesday, 22 May 2007 | 2:53 PM ET

This week's U.S.-China trade talks have fueled the debate over whether Washington should do more to enforce current trade laws.

Two trade policy experts took opposite sides of the question on "Morning Call."

Despite U.S. Treasury Secretary Henry Paulson's long-term approach to dialogue with China, "the Bush administration should be doing more to ensure that China obeys trade laws with the U.S.," said Jonathan Jacoby, Associate Director for International Economic Policy at the Center for American Progress.

Jacoby said he can’t blame Congress for wanting to enforce trade laws after looking at job losses in the U.S.

But another trade expert said it's hard to attribute job losses to trade.

U.S.-China Trade Policy
Debating the need to get Congress involved in U.S. trade policy with China, with Daniel Ikenson, policy analyst at the Cato Ctr. for Trade Policy Studies, and Jonathan Jacoby, associate dir. for intl. economic policy at the Center for American Progress

“Manufacturing is doing quite well," said Daniel Ikenson, Policy Analyst at the Cato Center For Trade Policy Studies. "In 2006, output is higher than it has ever been, revenues for most manufacturing industries are in record levels and (so are) profits for most of the 21 manufacturing sectors. Data are near record levels as well.”

He added that congressional intervention may make things worse.

“What we don’t need is for Congress to be so provocative with the legislation proposing and do something that would violate our own World Trade Organization commitments and possibly spark a trade war,” he said.

Ikenson described a case back in March in which the Chinese hinted they would be cutting subsidies for exporters and changing laws so that “import consumption is not dissuaded.”

“That is progress,” he said. “We need to get tough on China but not with more congressional involvement."