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Congress could delay action on China currency: aides
2007-09-04
Congressional action on legislation to pressure China into raising the value of its currency could be delayed until October because of other pending issues, congressional aides said on Tuesday. "I don't know that we'll get to currency legislation this month," a Senate Finance Committee aide said. Senate Finance Committee Chairman Max Baucus, a Montana Democrat, is focused more immediately on issues that require action by the end of September, the aide said. That includes renewing federal trade adjustment assistance for workers who have lost their jobs because of imports or a factory relocation overseas, and another program providing health care insurance for needy children, the aide said. The committee also will begin consideration this month of a free trade agreement with Peru, which the White House hopes Congress will approve in short order. The Senate Finance Committee and the Senate Banking Committee brushed off objections from the Bush administration and passed separate bills pressuring China on the currency issue shortly before Congress took its August break. While the two bills differ in details, both are based on the belief that China's currency is undervalued by as much as 40 percent and thereby gives Chinese exporters an unfair advantage in international trade. The two committees are expected to work together to come up with a consolidated bill. Bush administration officials have warned the legislation could violate World Trade Organization rules and trigger a wave of protectionism around the world. Many U.S. business groups fear Congress could create more problems than it solves by aggravating relations with Beijing. The U.S.-China Business Council has argued that a 25 percent rise in the value of the yuan against the dollar could reduce the total U.S. trade deficit by only $20 billion, or less than 3 percent, over two years as importers simply shift to other Asian suppliers. A coalition of steel industry, textile industry, small and medium-sized manufacturers and various labor groups known as the China Currency Coalition have been the main driving force behind the currency legislation. They argue that China's currency practices are an illegal export subsidy under WTO rules and believe the best way to deal with the problem is to give the Commerce Department new authority to slap duties on unfairly traded Chinese goods. Leaders in the House of Representatives plan to discuss the issue in the days and weeks ahead, including when to introduce their own bill and what provisions it should contain, a spokesman for the House Ways and Means Committee said.
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