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Senators will decide this week when to force a vote on their punitive tariff bill

WASHINGTON, DC – 09/27/06 – Senators Lindsey Graham (R-South Carolina) and Charles Schumer (D-New York) have said they would decide this week whether to force a vote on their bill to a steep “blanket” tariff on Chinese imports unless Beijing reappraises its current currency valuation policies.

Graham and Schumer – both vocal critics of the Bush Administration’s trade policies and leading advocates of trade sanctions against China – held a closed-door meeting yesterday with Treasury Secretary Henry Paulson, who last week made his first visit to China since he replaced John Snow in June.

''We let Secretary Paulson know that status quo is unacceptable for the business relationship between China and the United States,'' said Graham at a press conference held later in the day.

The Graham-Schumer measure would provide six months of negotiations on currency revaluation between China and the US and impose a 27.5% tariff on all Chinese imports to the US if the talks failed to produce an accord.

The proposed bill has drawn considerable criticism from a number of trade groups including the US Council for International Business and the Cato Institute’s Center for Trade Policy Studies.

In a strongly worded letter delivered Monday to the senate, both groups asserted that imposing the tariff would likely result in similar retaliatory measures against US exports to China, drive up American production costs, undermine the country’s global competitiveness, and negatively impact US consumers.

The groups said Senate passage of the Schumer-Graham bill “would derail the progress that has been made to date on China’s exchange rate policies and on broader
financial sector reforms that are the essential element of a long-term solution, as well as the many other issues on which the US government is seeking progress.” 

They also warned of negative reactions from other trading partners, saying the passage would represent a renunciation by the US of its obligations under World Trade Organization rules.

Graham predicted that the sanctions bill  – S295, which has less support in the House of Representatives – would ''pass overwhelmingly'' if it were brought to the Senate floor.

A Senate vote to defeat similar legislation last year failed 67-33.After completing his visit to China and other Asian countries last week, Treasury Secretary Paulson said that Washington and Beijing would soon be launching a new US-China strategic dialogue centered on trade, investment, and other aspects of their economic relationship.

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Korea, US Free Trade Pact ''Possible'' by Early 2007

WASHINGTON, DC – 10/25/06 – A free trade pact between the US and South Korea could become a reality by early 2007, says chief US negotiator Wendy Cutler at the opening of this week’s fourth round of talks between the two countries; since the two sides launched FTA negotiations in February they have reported little progress even though they postponed consideration of the most politically sensitive issues, such as US access to the Korean rice market.