House Democrats express concerns about trade barriers with China, Japan

Nine House Democrats have expressed concern about affects of trade barriers with China and Japan on U.S. companies.

In a letter sent to President Obama, members of the Ways and Means Committee cited continued trade issues with the two nations following the administration's release of the National Trade Estimates report, which identifies hurdles affecting U.S. exports, investments and the protection of intellectual property.

"As our economy turns the corner, including through significant growth in U.S. manufacturing and exports, this report serves as a reminder of the need to act aggressively to eliminate foreign barriers, which can stand in the way of further recovery," the lawmakers wrote. 

The lawmakers credited the White House for creating an Interagency Trade Enforcement Center (ITEC), aimed at pooling government resources to address unfair global trade practices.  

While Democrats said they will work to ensure the ITEC receives full funding, they also said that much depends on how the agency "is set up and on how it operates in practice."

"We also look forward to close collaboration with your administration to ensure that the ITEC lives up to its fullest potential," they wrote.

They noted that "many of China’s predatory trade practices" continue and last year the U.S. trade deficit with China increased to a record high $295 billion, up from $83 billion only a decade ago.

"A key test for the ITEC will be its effectiveness in addressing the trading barriers American businesses face with China," they wrote. 

Democrats and Republicans have expressed concerns over China's practices, including its undervalued currency, intellectual property and indigenous innovation practices and have repeatedly pressed for, at the minimum, discussions to continue with Chinese leaders.

Another problem the letter said is the opaqueness in Chinese laws and policies, particularly at the provincial and municipal levels, despite China's continued promises to make their policies transparent. The lawmakers argue that China is encouraging other countries such as Argentina to use similar discriminatory policies.

"We are looking to your administration to marshal all its resources, including through the ITEC, to identify ways to address these kinds of systemic problems, which are preventing more effective enforcement of China’s trade commitments," they wrote. 

They noted an uptick in trade cases against China "but there are significant systemic problems that undercut the U.S. ability to challenge much of China’s WTO-inconsistent behavior." 

They also praised the administration for the recent victory in the World Trade Organization (WTO) case against China involving export restraints on raw materials, and the subsequent filing of a case involving rare earth materials. 

Still, they say there is a fear that a crackdown by Congress or the White House would result in retaliation from China. 

"One such problem is Chinese threats and acts of retaliation aimed at chilling efforts to ensure China’s compliance with trade rules," they wrote. 

The lawmakers also cited issues with Japan, with which the U.S. has the third largest trade deficit of $63 billion. The report notes barriers to U.S. auto sector exports, agriculture products, insurance, drugs and medical devices.  

"The endemic barriers in that market not only present a significant trade enforcement challenge, but there also must be full knowledge of their nature in each of these areas, and whether and how they can be successfully addressed under the framework of potential entry by Japan into the Trans-Pacific Partnership," they wrote.

U.S. automakers say they oppose Japan joining the TPP talks because of those barriers on autos. 

The letter was signed by members of the House Ways and Means Committee including, ranking member Sander Levin (Mich.), Trade Subcommittee ranking Member Jim McDermott (Wash.), and Reps. Charles Rangel (N.Y.), Pete Stark (Calif.), John Lewis (Ga.), Richard Neal (Mass.), Xavier Becerra (Calif.), John Larson (Conn.) and Shelley Berkley (W.Va.).