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Summit News

U.S.-Korea deal seen helping to curb China imports

WASHINGTON (Reuters) - U.S. lawmakers worried about growing imports from China should approve a free trade deal with South Korea, rather than try to slap duties on Chinese goods, a top Bush administration official said on Tuesday.

U.S. Commerce Secretary Carlos Gutierrez listens to a speech at the China-U.S. Innovation Conference in Beijing December 10, 2007. U.S. lawmakers worried about growing imports from China should approve a free trade deal with South Korea, rather than try to slap duties on Chinese goods, the top Bush administration official said on Tuesday. REUTERS/Claro Cortes IV

“The Korean free trade agreement is probably the biggest thing we could do to really give Chinese imports competition and to diversify our business in Asia,” U.S. Commerce Secretary Carlos Gutierrez said in an interview with Reuters reporters.

The Bush administration faces an uphill battle to win approval of the free trade agreement with South Korea and two other trade pacts with Colombia and Panama before leaving office in January 2009.

Many Democrats and Republicans from U.S. auto-producing states complain the Korean agreement fails to effectively dismantle South Korean import barriers but will open the U.S. market to many more South Korean cars.

Farm-state lawmakers are also angry Seoul hasn’t fully reopened its market to U.S. beef.

Meanwhile, many lawmakers favor legislation to curb imports from China, which grew nearly 12 percent last year to a record $321.5 billion. China surged past Canada last year to become the United States’ top supplier of foreign goods.

One popular bill would broaden the Commerce Department’s authority to impose duties on Chinese goods by allowing it to take currency values into consideration.

Many U.S. lawmakers believe China’s tightly controlled currency is undervalued by as much as 40 percent and gives Chinese companies a big trade price advantage.

“We don’t think that legislation is the way to manage a trade relationship,” Gutierrez said. When Congress passes “protectionist legislation, we need to know there’s always a retaliation. ... It just doesn’t benefit anyone.”

Approving the Korea free trade agreement would be a positive way of dealing with Chinese imports because it would cut U.S. tariffs on South Korean goods, helping South Korea compete with China and grab a bigger share of the U.S. market for imported goods, Gutierrez said.

Approval of the South Korean, Colombian and Panamanian trade deals also would help keep the U.S. economy growing by expanding exports, Gutierrez said.

While Congress delays action on the three free trade pacts other countries are busily negotiating deals that could leave the United States lagging behind, he said.

“The world is moving ahead very rapidly and we’re standing still,” Gutierrez said.

Editing by Todd Eastham

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