USTR Nominee Tough on China

Rep. Rob Portman (search), nominated by President Bush to be his top trade negotiator, told Congress on Thursday that the United States needs "a tougher approach" to China.

Portman said he would order "an immediate top to bottom review" of the various trade complaints against China (search) if confirmed by the Senate.

He also said he would make an early trip to China to "demonstrate the urgency of resolving these problems and to deliver a strong message in person to Chinese officials."

"I think we need a tougher approach. I think we need to hold China to its commitments," Portman told the Senate Finance Committee during his confirmation hearing.

Portman's comments signaled a stronger push for China to deal with a soaring trade deficit (search) which last year hit $162 billion, the largest deficit the United States has ever recorded with any country.

Last week, Treasury Secretary John Snow increased pressure on China to stop pegging its currency, the yuan (search), to the U.S. dollar. He argued that China has done enough to prepare its economy for a switch to a currency whose value is set by market forces and that the change could be done immediately.

Chinese officials dispute this contention, arguing that they need to make further reforms in their financial system before making a switch in currency policy.

Portman was nominated by Bush last month to be the new U.S. trade representative, succeeding Robert Zoellick (search), who has moved in Bush's second term to the No. 2 post at the State Department.

Portman's nomination was expected to win easy approval when it comes to a vote in the Senate. However, Sen. Evan Bayh, D-Ind., has placed a procedural hold on the full Senate taking up the issue until he is given assurances by Senate Republicans, who control the chamber, that he will be allowed to have a vote on legislation he is promoting to make it easier to pursue unfair trade cases against China in the area of government subsidies that support Chinese companies.

During the hearing, a number of Democrats expressed reservations about supporting the proposed Central American Free Trade Agreement (search) with six Latin American countries, telling Portman the administration needed to show greater efforts to enforce current trade agreements before Congress will approve new ones, especially in the light of soaring trade deficits.

"CAFTA still has a long way to go," Sen. Max Baucus, the top Democrat on the panel told Portman. "We need to enforce the trade agreements that we have. We are not doing so."

In the hearing, Portman also appeared to signal a subtle shift in the administration's characterization of a soaring overall trade deficit which hit a record $666 billion last year in America's current account, the broadest measure of international trade.

"Some economists would argue that our current account deficit is not a concern. I think it is a concern. I would agree with you and others that it is something that we need to address," Portman said.