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True trade reform with China could come this fall because of a change of attitude by the White House, according to Republican U.S. Rep. Phil English.

Previous attempts in Congress to get trade reform legislation passed in Congress hasn’t passed as President Bush had indicated he would veto legislation that was tough on U.S. trading partners.

English, whose district includes most of Crawford County, said the Bush administration has changed its stance on recent trade agreements.

“In order to get free trade agreements moved forward (through Congress) for Peru, Panama and Columbia — they’ve (the Bush administration) agreed to a set of principles that for the first time deeply integrate labor standards and environmental standards into free trade agreements,” English said.

“The core set of ideals are sound and represent a real middle ground,” said English. “No one expected the White House to come this far (on trade reform) and for this reason — because they want to make progress on trade policy — I think they will want to embrace some legislation coming out of Congress.”

But area manufacturing representatives aren’t so optimistic.

“I’ll believe it when I see it take place,” said Scott Hanaway, president of the northwestern Pennsylvania chapter of the National Tooling and Machining Association, a trade group, and president of Tech Tool and Molded Plastics Inc. of Meadville. “Personally, I’ve lost a lot of faith in our (presidential) administration.”

“There’s been no concrete action taken by government,” said Ralph Pontillo, president of the Manufacturer’s Association of Northwest Pennsylvania, a trade group that represents about 5,000 companies in 17 counties.

Trade between China and the U.S. has been a prickly issue among American manufacturers this decade.

Manufacturers both here and across the country have said China has purposely kept its currency undervalued by as much as 40 percent, making Chinese goods cheaper for U.S. consumers and making American products more expensive in China.

In Crawford County, it’s a crucial issue because there is a heavier reliance on manufacturing than in other sections of Pennsylvania or the nation.

Close to 20 percent of all jobs in the county are related to manufacturing, compared to about 12.4 percent for Pennsylvania and 11 percent nationally. Most local manufacturing jobs are in the tooling and machining industry, supplying tools, equipment and parts to major manufacturers.

Since the recession that began in the fall of 2000, Crawford County has lost an estimated 1,000 jobs in the tooling and machining industry and unfair competition from China is seen as an underlying factor.

English has introduced legislation to impose tariffs on Chinese imports if the U.S. Treasury Department finds illegal activity. The tariff would be equal to the percentage of manipulation. He introduced similar legislation in both 2003 and 2005, but both efforts failed to pass in the House.

English also is confident some form of trade reform legislation will pass because Democrats, who now control Congress, want to make progress on the issue.

“They’re now looking for positions that allow them to be pro-trade, but also strengthens trade policy,” said English. “I believe in free trade, but I argue for fair trade. I think this represents a middle ground that a lot of Democrats can embrace.”

Though legislation may pass in the House, English said it could be a tougher sell in the Senate.

That’s because Sen. Max Baucus, a Democrat from Montana, is the majority leader on the Senate Finance Committee, which would control the legislation in the Senate. Baucus has been a supporter of a tough stance on China rather than taking a middle ground approach English and others favor.

Legislation in the Senate proposed by Sen. Chuck Schumer, a Democrat of New York, and Lindsey Graham, a Republican of South Carolina, would put even tougher tariff sanctions of up to 27.5 percent on Chinese goods.

However, area manufacturing representatives remain skeptical any meaningful legislation may happen because the China issue has dragged on for so long.

“We all in support of free trade, but it has to be fair trade,” Pontillo said. “I’m disappointed in Washington because there’s more political consideration than economic consideration. China is virtually stealing our intellectual property.”

Pontillo said he’s concerned the U.S. isn’t vigorously enforcing trade laws to protect intellectual property.

“They’re counterfeiting our products and shipping them back to our country,” Pontillo said. “It’s leading to a huge trade imbalance. We need to continue to communicate with elected officials.”

According to the Commerce Department, the U.S. had a record $763.8 billion trade deficit in 2006, with one-third of that imbalance reflecting a $232.5 billion deficit with China, the highest ever recorded with a single country.

While Congress is talking about trade law reform “I’m not sure they’ll put some teeth in it,” said Larry Sippy, a past national president of the National Tooling and Machining Association and an advocate both trade and Chinese currency reform. Sippy also is president of Sipco Molding Technologies of Meadville.

China also may not just accept U.S. trade reform actions because the U.S. wants it, he said.

“China looks like it could push back (economically). They said they’ve got more (American) dollars than we do” because China buys many of the bonds the U.S. government issues to finance the nation’s debt, he said.

Hanaway said trade reform isn’t just a monetary issue, either.

“It’s about the health and welfare of the country, safety and long term environmental issues,” Hanaway said, referring to the recent product safety recalls of goods sold in the U.S., but made in China. The products have included everything from lead paint in children’s toys to materials used in anti-freeze found in toothpaste sold in America.

Brian Deane, president of NuTec Tooling Systems of Meadville, said manufacturers have to keep pushing legislators on the trade issue.

“We have to keep talking about it, keep it in the limelight so it doesn’t go away,” he said.

Despite skepticism over the potential to get new trade reform legislation passed in Congress, area manufacturing representatives said they’ve been pleased with the efforts put forth by English.

“He’s been fighting the battle with us,” said Deane.



Keith Gushard can be reached at 724-6370 or by e-mail at kgushard@meadvilletribune.com.

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