US lawmakers target China currency policy

WASHINGTON – Firing angry remarks at China, US lawmakers on Wednesday unveiled a plan to retaliate against countries that allegedly manipulate their currencies to snare an edge in international trade.

‘The time has come for Congress to stand up for American workers and not allow China to run roughshod over the American economy. With this legislation we will finally force China to stop cheating and level the playing field for America’s manufacturers,’ said Republican Representative Tim Murphy.
The Currency Reform for Fair Trade Act, backed by Republicans and Democrats as well as business groups and major labour unions, aims to use US anti-dumping and countervailing duties to strike back at prolonged currency manipulation.
US lawmakers have long accused Beijing of keeping the yuan, or renminbi, artificially low – a step that would boost its exports by making Chinese products less expensive relative to US goods on global markets.
‘It’s time to treat illegal currency intervention like the outrageous trade subsidy it is,’ Republican Senator Jim Bunning said as the legislation was introduced in the Senate and House of Representatives.
The bill ‘would give trade remedies to American businesses and workers. It would send a clear message to China – and any other country considering currency manipulation – that this practice is unacceptable,’ he said.
The legislation directs the US Commerce Department to make a public finding of whether a given country is manipulating its currency, and declares that such behaviour can be punished by levelling punitive duties on the goods from that country or other trade-related steps.
‘Our laws must provide mechanisms to cite countries for manipulating their currency and also provide remedies, so US workers are not put at a competitive disadvantage,’ said Democratic Senator Debbie Stabenow.
In keeping with World Trade Organisation (WTO) rules, the remedies would only be imposed if the US International Trade Commission finds that the unfair practice has caused or threatens to cause material injury to US companies and workers, according to a summary provided by the law’s supporters.
No countries are specifically named in the legislation.
In mid-April, US President Barack Obama’s administration ruled that China had not manipulated its currency to gain competitive advantage, but that it remained undervalued.
The Treasury Department said in its twice-yearly global currency policies report that no major US trade partner had manipulated its exchange rate to gain an unfair competitive leverage.
The report appeared to be an abrupt about-face for Treasury Secretary Timothy Geithner, whose comment that China manipulated its currency during his January Senate confirmation hearing set off alarms in Beijing.
-Nampa-AFP