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Baucus Says He Would Press China Over Trade, Human Rights

Photographer: Tom Williams/CQ Roll Call via Getty Images

U.S. Senator Max Baucus said the U.S. and China must collaborate on curbing greenhouse gas emissions, including projects on energy efficiency, transportation and carbon limits. Close

U.S. Senator Max Baucus said the U.S. and China must collaborate on curbing greenhouse... Read More

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Photographer: Tom Williams/CQ Roll Call via Getty Images

U.S. Senator Max Baucus said the U.S. and China must collaborate on curbing greenhouse gas emissions, including projects on energy efficiency, transportation and carbon limits.

Senator Max Baucus, nominated to become U.S. ambassador to China, told lawmakers he would place top priority on boosting trade while also pressing that nation over computer breaches and crackdowns on dissidents.

“The U.S.-China relationship is one of the most important bilateral relationships in the world,” Baucus, a Montana Democrat, told the Senate Foreign Relations Committee today at his confirmation hearing. “It will shape global affairs for generations to come. We must get it right.”

Baucus said he’ll take aim at breaches in computer security affecting U.S. companies. He said both nations must collaborate on curbing greenhouse gas emissions, including projects on energy efficiency, transportation and carbon limits.

He said he would cooperate with China on threats by North Korea’s nuclear program, and would address China’s Nov. 23 declaration of an air defense identification zone in the East China Sea, covering areas claimed by Japan and South Korea. That action sparked a rebuke by Secretary of State John Kerry.

Senator John McCain, an Arizona Republican, said China’s “aggressive behavior” is “part of a pattern of their ambition to dominate that part of the world.”

“We are seeing a time of rising tensions in Asia” and the U.S. must keep a close alliance with other countries in the region, McCain said.

“I don’t disagree with you,” Baucus responded.

No Opposition

There was no sign of opposition from Baucus’s fellow senators.

“I am sure you will be confirmed,” committee Chairman Bob Menendez, a New Jersey Democrat, told Baucus as the hearing began in Washington. The chairman scheduled a committee vote on the nomination for Feb. 4.

Senator Bob Corker of Tennessee, the top Republican on the foreign relations panel, said Baucus has a strong track record on free trade and urged him to keep “Western values front and center.”

“I look forward to seeing you on the ground there,” Corker said.

Baucus was nominated by President Barack Obama to succeed Gary Locke as ambassador. He would enter the post at a time of tension and prospects in the relationship between the world’s two biggest economies. His departure also would shake up the leadership of the Senate Finance Committee, of which he is chairman, potentially slowing tax-law revisions and free-trade deals.

Retirement Planned

Baucus had planned to retire from Congress at the end of this year, his sixth term.

In his testimony to the committee, Baucus stressed his free-trade background in Congress, working on deals with Chile, Australia, Panama, Peru and other nations. He said he has traveled extensively to markets for U.S. goods, including Russia, Japan, Spain and Belgium.

“I have learned some core lessons along the way,” he said. “Among the most important, I have become a firm believer that a strong geopolitical relationship can be born out of a strong economic relationship, which often begins with trade.”

China has been flexing its power in Asia as it asserts claims to disputed territories and resources. It has been involved in tense disputes with Japan, South Korea and the Philippines, and expanded national military spending by 10.7 percent to 740.6 billion yuan ($122 billion) in 2013.

Dissident Crackdown

China’s crackdown on dissenters included the jailing this month of legal scholar Xu Zhiyong. Xu, the most prominent activist jailed since Nobel Peace Prize winner Liu Xiaobo in 2009 was sentenced by a Beijing court to four years in prison on charges of gathering a crowd to disturb public order.

Other issues include cyber-attacks and efforts to gain trade secrets of U.S. firms.

Trade tensions between the U.S. and China are running high. Since Obama took office in 2009, the two nations have sparred over trade in goods and services including autos, poultry, clean-energy manufacturing, tires, rare-earth elements and credit-card payments.

China joined the World Trade Organization in 2001, and the U.S. has filed 15 disputes against the Asian nation, more than any other country, according to a report from the U.S. Trade Representative’s office in December. The agency on Jan. 13 said China wasn’t adhering to a WTO ruling involving trade in steel, the first time U.S. officials challenged China’s claim of compliance.

Intertwined Economies

The nations’ economies are becoming more intertwined, with U.S. trade in goods with China almost quadrupling, to $512 billion, from 2003 through 2013, according to Commerce Department data. The U.S. trade deficit with China declined about 7 percent last year, to $294 billion, after increasing for four years.

Baucus’s confirmation would begin a series of changes in Senate committee leadership, which may in turn lead to shifts in policy areas. His departure from the Finance panel would probably elevate Oregon Democrat Ron Wyden to lead the committee, which determines tax, trade and health policy.

Wyden, who now leads the Energy and Natural Resources Committee, would be replaced by Senator Mary Landrieu, a Louisiana Democrat with close ties to the oil and natural gas industries.

The shift in leadership would make it tougher, if not impossible, to enact major changes in the U.S. tax code this year. Baucus and his House Republican counterpart, Ways and Means Committee Chairman Dave Camp of Michigan, have traveled the U.S. to promote a tax-code overhaul and released discussion drafts on four areas of tax policy.

To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net; Jodi Schneider at jschneider50@bloomberg.net

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