US senators act to repeal China PNTR status
(AFP)
Updated: 2006-02-10 08:25

Legislation was introduced in the US Senate to repeal permanent normal trade relations (PNTR) status for China, citing its alleged unfair trade practices.

The US Congress granted China the PNTR status in 2000, which paved the way for the most populous nation to enter the World Trade Organization and for US businesses to deal more seamlessly with Beijing.

But Senators Byron Dorgan and Lindsey Graham, authors of the legislation representing both sides of the aisle, said the status should be rescinded in retaliation for China's unfair trade practices which they said were responsible for the widening US trade deficit.

They cited practices including piracy, currency manipulation, violation of its own labor laws, and barriers to prevent US products from entering the Chinese market.

"There's nothing normal or fair about any of these methods," Dorgan, the Democratic Senator from North Dakota, told a new conference with Graham, a South Carolina legislator from President George W. Bush's Republican party.

Graham is also behind another bipartisan legislation that would force China to revalue its currency or face higher tariffs on Chinese imports.

The legislation, to impose a 27.5 percent tariff across the board on Chinese imports, gathered good support in Congress.

After months of intense US pressure, China freed the yuan from an 11-year-old peg to the US dollar in July last year, revaluing it by 2.1 percent and putting it in a trade-weighted basket of currencies. The yuan was also allowed to move 0.3 percent either way on any given day.

But legislators and businesses in the United States say the yuan remains undervalued and continues to sink the country's trade balance deeper into the red.

The US deficit is expected to pass the key 200 billion dollar mark when 2005 figures are released Friday, roughly 40 billion dollars more than the previous year, Dorgan and Graham said Thursday.