U.S. Senators Propose Bill to Repeal China's PNTR

Two U.S. senators have proposed legislation that would repeal permanent normal trade relations (PNTR) status for China, after noting unfair trade practices and an increasing trade deficit. Congress granted China PNTR status in 2000, which allowed for their entrance to the World Trade Organization (WTO).

Two U.S. senators have proposed legislation that would repeal permanent normal trade relations (PNTR) status for China, after noting unfair trade practices and an increasing trade deficit. Congress granted China PNTR status in 2000, which allowed for their entrance to the World Trade Organization (WTO).

Senators Byron Dorgan and Lindsey Graham have co-authored a bill to now repeal PNTR, referencing China's unfair trade practices, including piracy, currency manipulation, violation of its own labor laws and barriers to prevent U.S. products from entering the Chinese market.

"I think we have reached the tipping point on the issue with China," Dorgan said. "It cheats in a way that hurts this country."

Graham explained that the bill was "drastic in the sense of politics," but explained "I think it's necessary in the sense of business." Graham is also backing another bipartisan measure that would force China to revalue its current or face higher tariffs on Chinese imports. China's currency closed at its highest level since a July revaluation, topping off a week-long increase. China's yuan has risen against the dollar since the central bank revalued it by 2.1 percent against the U.S. dollar in July.

China is currently facing pressure from the U.S. and its other trading partners to allow the yuan to strengthen further. Critics of China's foreign exchange controls sees the currency as undervalued and argues that this gives Chinese exports an unfair advantage.

The proposed legislation would impose a 27.5 percent tariff across the board on Chinese imports is gaining Congressional support.

"There is nothing normal about the way China manages its currency. They manipulate their currency to get an economic advantage over the world, not just the United States, and the world is telling China, 'end your manipulation practices and allow your currency to go to its market value.' " Graham said.

The U.S. deficit is expected to pass $200-billion when the 2005 figures are released later today. This is projected to be $40 billion more than the previous year, according to Dorgan and Graham.

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