CONGRESS English promotes trade bill

The congressman wants to level the trade playing field.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
MERCER, Pa. -- U.S. Rep. Phil English of Erie, R-3rd, has introduced legislation aimed at forcing the administration to negotiate new trade rules with the World Trade Organization.
If the WTO refuses to go along, the United States should consider withdrawing from the organization, English said Monday as he outlined House Bill 705, which he introduced last week.
"The tax structure supported by the WTO discriminates against American manufacturers by promoting the double taxation of American products overseas and allowing our competitors tax-free access to our market," English said in a brief stop at the Penn-Northwest Development Corp. office.
Penn-Northwest is Mercer County's designated chief economic development agency.
English, a member of the House Ways and Means Committee, which has jurisdiction over tax and trade issues, has been critical of the WTO's rules in the past, asserting they adversely affect American producers and manufacturers.
He said his bill has won the interest of House leadership and he predicted it will be considered on the House floor this week.
Seeks WTO negotiations
Specifically, the bill asks the president to pursue trade negotiations with the WTO to eliminate tax barriers that make it difficult for American companies to trade abroad but lucrative for foreign producers to sell their wares here, English said.
Any efforts to unilaterally alter the rules would invite appeals to the WTO by foreign producers, English said.
Reforming the United States' tax code may be necessary to help level the trading playing field, English said, noting that our trading partners enjoy a $120 billion trade advantage over U.S. producers.
The American tax system has taxes built right into goods produced in this country, English said, referring to the corporate income tax on companies.
When domestic producers try to market their goods abroad, they are hit by additional Value Added Taxes imposed by foreign governments, he said.
However, foreign producers don't have that corporate income tax that American manufacturers must deal with, nor are they hit with an American version of the Value Added Tax they place on imports into their countries, English said.
The net result is that an item made and sold in China for $100 can be sold for under $89 in the United States. However, a $100 item produced in the United States would cost $117 in China, he said.
The current domestic tax structure is a factor in encouraging companies to open overseas production facilities, sending jobs abroad, he said.
He stopped short of calling for the elimination of the corporate income tax but said it could perhaps be replaced by a consumption tax, such as a national sales tax.
English said he anticipates opposition from foreign producers as well as some domestic retailers who bring in cheaper imported goods and some manufacturers that have invested in overseas production facilities.