U.S. Again Rejects Sanctions on China

The Bush administration on Friday turned down the latest request for a trade case to be brought against China over its currency system.

U.S. Trade Representative Rob Portman rejected a petition filed in April by House and Senate members asking the administration to use a provision in U.S. trade law known as Section 301 that allows economic sanctions to be used against unfair trade practices.

“We do not believe that a Section 301 action is appropriate or a productive way” to achieve the goal of a flexible Chinese currency system, a spokesman for Portman, Richard Mills, said in a statement.

The decision came a little more than a week after the Treasury Department declined in a report to Congress to cite China as a country that manipulates its currency to gain trade advantages.

The petition filed by lawmakers, including Rep. Benjamin L. Cardin of Maryland, the top Democrat on the trade subcommittee of the Ways and Means panel, raised the same argument made by U.S. manufacturers: that China is unfairly manipulating its currency to gain trade advantages by retaining for the last decade a system that links the yuan to the U.S. dollar at a fixed value of 8.28 yuan to the dollar.

American manufacturers contend that Beijing’s system has undervalued the yuan by as much as 40%, making Chinese products cheaper in the U.S. market and American goods more expensive in China.

Friday’s announcement marked the third time the administration had turned down a request for the United States to bring a trade case against China over the issue before the World Trade Organization.

Separately, U.S. Commerce Secretary Carlos M. Gutierrez said Friday that he would push China next week to crack down on the piracy of U.S. movies and to loosen rules on government purchases of software as a step toward lowering barriers to American exports.

“We want to have access for our goods,” Gutierrez said in an interview before leaving today for a weeklong visit to Russia and China.

“One item that is very important for our workers and businesses is the area of intellectual property.”