Grassley raised these issues to the U.S. Trade Representative and the Secretary of Commerce during the first of three hearings dedicated to trade in the era of globalization. Iowa's senior senator serves as chairman of the Finance Subcommittee on International Trade, and he is a specially- designated Congressional Trade Advisor.
"Changing world political conditions have brought a host of new challenges. China's surging economic prowess, its vast array of restrictive important regulations and its close ties between civilian industry and the military pose tough questions trade and security policy," Grassley said.
During today's hearing, Grassley focused on the alternative non-tariff trade measures put in place by China after 1995, when China abolished non-tariff barriers on 176 items as required by an international agreement reached in 1992, and after 1997, when China let lapse import restrictions on 13 additional goods. "These new defacto licensing requirements are simply non-tariff trade barriers that make it difficult to believe China is truly serious about reforming its trade regime," he said.
Grassley also took aim at China's failure to allow access to its retail market for U.S. meat, including pork. He pressed the U.S. trade ambassador about China's one-year trial program to import U.S. pork for the Chinese market. Grassley said that China made specific commitments in 1997 to improve access to its highly regulated ag market but failed to make good on its promises. "Now the question is, what will the United States do about China's inaction?" Grassley asked today. Barshefsky responded that the U.S. was very unsatisfied with Chinese performance and will press them to do better.
Grassley also sought information from the Commerce Secretary about the process that follows shipment of exports to verify that the U.S. exports that include both civilian and miliary capability are not diverted to military use. Just one year ago, federal officials said that Commerce Department procedures were insufficient to determine whether purchases in Cina were using sensitive equipment that they important from the U.S. in the way they promised.
In addition, the senior farm state lawmaker also warned that the advent of the new Euro currency will make the 15 member states of the EU even more important as both economic partners and competitors. Already, the EU is the second-largest market for U.S. agricultural products. "The EU's commitment to fair agricultural trade needs to be closely monitored and enforced," he said. "USTR simply must make a sustained commitment to insure that the WTO ministerial conference and new multilateral discussions focus on improving market access for American farmers."
Finally, Grassley used today's forum to win a commitment from Treasury officials to study ways to improve the U.S. Tariff Code. "These hearings are about globalization: liberalizing and streamlining trade policy for a new era of competition and cooperation. It's hard for me to see how we can streamline our trade operations without taking a close look at the tariff code. As it stands, the code is complex, costly, difficult to understand, and hard to enforce," Grassley said. In response, Lawrence Summers, Deputy Treasury Secretary, said he would investigate the complex tariff code and get back to Grassley.