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US House rejects bill on China arms sales
Updated: 2005-07-15 10:21

WASHINGTON - The US House of Representatives rejected a measure that would have imposed stiff penalties on European firms selling weapons technology to China.

By a vote of 215 to 203, the "East Asia Security Act" failed to garner the two-thirds majority needed for passage after US business groups reportedly expressed concerns that they would be hurt by the measure.

Congressional officials said after the vote that the legislation's author, Republican Henry Hyde, will make a second attempt to pass the bill next week by inserting it in State Department funding legislation, where it has better odds of passage.

The bill welcomed deferral of an EU decision to terminate an arms embargo to China, but expressed concern that sales could proceed indirectly via various loopholes.

Among other measures, the legislation called on US President George W. Bush to make an annual report to Congress "identifying every foreign person of the EU that has exported to China any arms or dual use technology for military end use since January 1, 2005."

Democrats offer new bill targeting China trade

Also in the House, opposition Democrats introduced a bill aiming to cut the massive trade deficit with China by targeting what they called unfair trade practices.

"The unrelenting, sky-high trade deficits with China reflect a failure by the Bush administration to adopt trade policies that promote the interests of US workers, businesses and farmers," said Representative Charles Rangel, one of the sponsors.

Although introduction of a bill does not guarantee passage, the move highlighted the growing discontent in Congress over China, which has been accused of manipulating its currency to help exports.

The bill would allow US workers and businesses to challenge Chinese subsidies to manufactured and agricultural exports, and make clear that "currency manipulation" is an unfair trade practice.

The bill would also revive the "Super 301" provisions of US law to direct the administration to identify barriers to US exports and an other unfair practices, including failure to protect intellectual property rights.

Rangel said President George W. Bush has failed to get a level playing field with the Chinese.

"Time is up, and the Bush administration's China trade policy has flunked every test," he said.

"The growth in China's economy is one of the most important and predictable developments of the 21st century and yet the Bush administration is like a deer caught in the headlights," he said.

"Since the president has no viable policy for dealing with trade with China, Congress must step in on behalf of America's working families and small businesses."

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