Outsourcing, Piracy and Quotas Pose Foreign Policy Challenges

0

China’s emergence as an economic power has brought out a whole range of interest groups in Washington looking to shape U.S. policy and then capitalize on the outcome.


The list of power players includes members of Congress and the Bush administration, along with industry groups, labor unions and familiar foreign policy names like Henry Kissinger, the former secretary of state.


The hottest China-related issue in the presidential campaign has been the outsourcing of jobs. By one estimate, nearly 100,000 U.S. jobs have been lost to China this year, more than double the number in 2001.


Other issues range from currency manipulation to piracy and quotas. The political divisions usually don’t break along party lines, but rather regional and industry-based winners and losers.


For example, some members of Congress from Southern states want China to put a halt to alleged dumping of textile products in the U.S. Midwesterners want China to lift agricultural restrictions.


There is also a sizeable bipartisan faction in Congress opposed to increasing trade with China on ideological grounds, including California Reps. Dana Rohrabacher, R-Huntington Beach, and Tom Lantos, D-San Mateo.


“We have built the infrastructure (the Chinese) need so they can deliver products to us at lower prices to undercut our businesspeople,” Rohrabacher said. “We need to charge higher fees on containers coming in from China and we need to quit subsidizing those businessmen doing business overseas.”


The Bush administration has taken a cautious approach of keeping relations with China friendly in order to protect U.S. business interests. Meanwhile, it is pushing China to comply with the World Trade Organization’s list of requirements to open its economy and halt dumping practices.


“The U.S. and the rest of the world is watching very carefully how China implements these requirements,” said Bob Kapp, the outgoing president of the U.S.-China Business Council.


Key administration figures on China are U.S. Trade Representative Robert Zoelick and his China specialist Charles Freeman the point men on trade rule compliance and Commerce Secretary Don Evans, the prime contact for U.S. businesses in China.


In Congress, there has been some impatience among members of both parties who want to see faster progress on compliance.


Senate Foreign Relations Committee members Joseph Biden, D-Del., and Sen. Christopher Dodd, D-Conn., have urged a crackdown on piracy and theft of intellectual property in China.


Sen. Charles Schumer, D-N.Y., and Rep. Jim Leach, R-Iowa, have been pushing for China to free its currency, which they say is pegged to the dollar at an artificially low rate. This keeps the price of Chinese goods low while U.S. goods sold to China are more expensive.



Interest groups


Topping the list of lobbyists are government-relations executives at large corporations such as Boeing Co., American International Group, Caterpillar Corp., Motorola Corp. and Microsoft Corp.


“As a rule, the business community doesn’t want to rock the boat,” said James Lilley, senior fellow with the American Enterprise Institute and former U.S. Ambassador to China. “Boeing wants to sell more airplanes to China, so they don’t want anyone to irritate the Chinese so they turn to Airbus.”


Mainstream corporate interests are primarily represented by the U.S.-China Business Council and the U.S. Chamber of Commerce.


Companies also hire influential Washington insiders, such as Kissinger Associates, the firm founded by the former secretary of state. Another well-known China expert sought by companies on China: Brent Scowcroft, who was National Security Advisor under President George H.W. Bush.


Business is hardly united in seeking fewer restrictions on China. Even Kapp said many members of the U.S.-China Business Council are concerned about intellectual piracy.


Textile manufacturers, who have been hit hard by competition from China, are desperately demanding the maintenance of import quotas on several apparel categories, including underwear, trousers and cotton sheets. They claim that where other quotas have been lifted, China has flooded the U.S. market with cheap textiles.


“China is a huge problem. If we don’t do something about China, we’re out of business. It’s that simple,” said Lloyd Wood, spokesman for AMTAC.


Labor unions have also mounted a push to impose restrictions on both Chinese imports and on the practice of granting subsidies to U.S. corporations that set up factories in China. One key labor lobbyist is Thea Lee, assistant director of public policy for the AFL-CIO. Also active on the labor front, especially on the textile issue, has been Unite HERE, the recently combined union of textile and hotel and restaurant workers.


In response to the rising importance of these issues, Chinese diplomats and top government officials have also been far more visible in recent years on Capitol Hill and in the media.


Besides responding to the various issues raised by U.S. voices, they have their own set of concerns. The Chinese want the U.S. to lift subsidies of certain crops, such as soybeans, and stop arms shipments to Taiwan.

No posts to display