Bush helps Dole by warning China

Sen. Elizabeth Dole (R-N.C.) is getting a hand in her difficult reelection bid from the Bush administration. 

The administration has announced that it is preparing a potential World Trade Organization challenge against subsidies it contends the Chinese government provides its industry, and trade officials are giving Dole the credit for bringing the issue to their attention.

{mosads}Observers see the timing of the administration’s move as linked to Dole’s tough reelection campaign, given that industry groups have been asking the administration to look into the matter for more than a year. The administration announced the move in a letter sent to Dole less than two weeks before Election Day.

Dole, who trails state Sen. Kay Hagan (D) by two points in the RealClearPolitics average of polls, raised the issue in a letter to U.S. Trade Representative Susan Schwab early this month, asking the administration for action. Schwab responded three weeks later in an Oct. 23 letter that thanked Dole for bringing the issue to her attention.

“On receiving your letter, I immediately directed my staff to intensify their analysis of whether such subsidies violate China’s WTO obligations,” Schwab wrote.

Schwab also noted that she had written China’s minister of commerce to express concern over potential WTO-illegal subsidies, and to indicate that the U.S. was preparing a case if China did not “act promptly to eliminate them.” She said USTR’s initial analysis “confirms your concern that certain Chinese subsidy programs appear to raise serious WTO issues.”

The results of a WTO case might take years, but the action by USTR could be used by Dole to highlight her influence in Washington. Hagan has pounded Dole on the issue of job losses in North Carolina, a state that has shed more than 100,000 textile and apparel jobs over the last eight years, according to the U.S. Bureau of Labor Statistics. Hagan has also criticized her support for increasing trade with China and other countries.

Dole’s office issued a statement that highlighted the senator’s ability to help her state’s workers.

“This is just one in a long list of actions Sen. Dole has taken to level the playing field for North Carolina workers, and she appreciates the administration’s prompt response to her concerns about China’s unfair trading practices,” the statement read.

Lobbyists in Washington see the timing of the decision as having everything to do with politics. They noted that the National Council of Textile Organizations asked USTR to study the issue more than a year ago in a Sept. 11, 2007 letter.

One lobbyist said the idea that Dole had brought the issue to USTR’s attention was laughable. “I laughed out loud at the text of this,” said the source, an opponent of a WTO case who asked to speak on background. “It’s definitely all about politics.”

The action also could help embattled Republican Rep. Robin Hayes, who represents a textile-heavy district. Hayes, who also asked the administration to make the move and is facing a tough reelection bid, urged the administration to pursue a trade case in a press release on Monday.

Lobbyists said they also saw the move by USTR as linked to a request earlier this month by Ways and Means Committee Chairman Charles Rangel (D-N.Y.) meant to help the domestic textile industry. Rangel asked the International Trade Commission to collect data on Chinese imports, and took a shot at the administration’s handling of the issue.

“While the administration does not appear to be taking this concern seriously, the Committee on Ways and Means has a clear interest in and a responsibility to address this issue and, if warranted after reviewing the data, prevent harm to American workers, industry and communities.”

The American Manufacturing Trade Action Coalition called the letter to China from Schwab a “good first step” and praised Dole and Hayes.

“On behalf of our members, AMTAC would like to thank Sen. Dole as well as Congressman Robin Hayes of North Carolina for pressing the Bush administration to raise this issue with the Chinese government,” AMTAC Executive Director Auggie Tantillo said.

Cass Johnson of the National Council of Textile Organizations said the group believes China provides a number of subsidies to its industry, but that sometimes it is difficult to gather data.

For example, Johnson said his group has asked the administration to look into a Chinese program that reduces the interest companies pay to Chinese banks by 3 percent, as long as those companies are exporting products. The value of the subsidy could be as high as $730 million a year, he said.