Senator says currency bill should reach Obama

jackalope

Former Staff
Jan 2010
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Maine
Senator says currency bill should reach Obama
WASHINGTON | Fri Sep 30, 2011 2:11pm EDT

(Reuters) - A top Democratic senator on Friday said he was confident the Senate would "overwhelmingly" pass a bill next week to crack down on China'scurrency practices.

Senator Charles Schumer also told reporters he thought it would be difficult for Republican leaders in the House of Representatives to block the legislation, making it likely it would reach President Barack Obama's desk.

However, Schumer said he didn't know if Obama would sign the bill into law. "They said they're looking at it, so you'll have to ask them," he said.

A key provision would make it easier for U.S. companies to persuade the Commerce Department to slap duties on goods from countries that undervalue their currency.

The bill also imposes other punitive measures, such as denying Overseas Private Investment Corp financing, to countries with "fundamentally misaligned currencies" that the Treasury Department has designated for priority action.

The House, when it was still in the control of Democrats last year, past a similar measure that died in the Senate because it never came to a vote.

House Republican leaders have not been eager to take up China currency legislation this year, but Schumer said he expected that to change after the Senate vote.

Jeff Sessions is one of many Senate Republicans who support the currency bill. Asked what he would say to encourage House leaders to take up the legislation, Sessions replied: "I think the message is this country can not allow the loss of a single job because of the unfairness of our trading partners."

more: Senator says currency bill should reach Obama | Reuters

Whoa ... interesting! Don't know much about it, but from this short article, sounds like a good idea to me. Wonder why Obama might not sign it?
 

jackalope

Former Staff
Jan 2010
51,139
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Maine
Longer article on this bill. It's an interesting read. I'm hoping this bill passes, and Obama signs it. And that the US doesn't lose a case at the WTO b/c of it. It's just not right to be facing a trade partner with a stacked deck.



Senators court 2012 voters with China currency


(Reuters) - For U.S. lawmakers eyeing their re-election prospects next year, this week provides a chance to show they mean business about cracking down on China's currency practices and returning jobs to America.

Critics say the legislation that looks set to pass the U.S. Senate this week is more likely to help a factory worker in Hanoi than in Ohio, and could expose the United States to a damaging trade row with its fastest-growing export market.

But those arguments don't wash with Senator Sherrod Brown, a Democrat from the manufacturing heartland of Ohio.

He recounts U.S. warnings to China going back to the 1990s, when Congress fought annually over trade relations.

"That was back when our trade deficit with China was $10 billion. Now it's $200 billion plus. This will help to level the playing field. China gaming the currency system has clearly undercut our ability to compete in many things," Brown said.

(snip ... )

If the bill passed the Democrat-controlled Senate, it then goes to the House of Representatives which is run by the Republicans. They are traditionally less supportive of measures to crack down on trade. But that may be changing.

Last year, 99 Republicans voted for similar legislation. This year, supporters already have more than 200 co-sponsors for the bill and expect this week to reach 218, the amount needed for approval if House Speaker John Boehner and Majority Leader Eric Cantor allow a vote.

Boehner's office has declined to say if Republicans, under pressure to drop their opposition to the bill, could change their mind and bring it to the floor.

JOBS BILL FOR VIETNAM

At the heart of the legislation is a claim that China's currency is deliberately undervalued, giving Chinese companies an unfair price advantage in international trade.

John Frisbie, president of the U.S.-China Business Council, which represents American companies that do business in China and have the most to lose from increased friction on the trade front, concedes China's currency is probably undervalued. But he notes that it has risen about 30 percent since 2005.

In that time period, the United States has continued to lose manufacturing jobs, raising the question of whether a strong revaluing of the yuan would help save U.S. jobs.

The Senate bill is the wrong approach because most of the goods the United States imports from China are no longer made by U.S. industry, Frisbie said.

Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics, is also skeptical.

"I've always been of the view that, if the Chinese currency were to appreciate, we're not going to get those jobs back in the U.S.. They will migrate to Indonesia or Vietnam or Bangladesh perhaps Sub-Saharan African -- the lowest next lowest cost place," Lardy said.

Nobel prize-winning economist Paul Krugman said such arguments ring hollow. He said China's undervalued currency was standing in the way of a much-needed decline in the U.S. trade deficit, and it was time to act.

"Holding China accountable won't solve our economic problems on its own, but it can contribute to a solution - and it's an action that's long overdue," he wrote in the New York Times.

One big risk for the United States is a potential challenge to any legislation at the World Trade Organization which experts say Beijing might win, giving China the right to impose retaliatory measures. Many businesses fear China would find a way to get back at the United States even before then.

Obama has not taken a formal position on the bill, prompting one Senate Republican last week to call on the administration to clearly state its views before the Senate begins debate on the legislation this week.

Meanwhile, Brown said he is convinced the House will be forced to act after the Senate vote.

"I know there are lot of freshmen Republicans elected last year that campaigned on 'stand up to China' and this is their best opportunity to show it," Brown said.

Senators court 2012 voters with China currency | Reuters
 
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Well, if anybody were to lose a case before the WTO it would be China.

Do I think the bill will be passed? No. Do I think it should be? Yes, but subject to the caveat that it should be MUCH stronger response.

The bill calls for:

"A key provision would make it easier for U.S. companies to persuade the Commerce Department to slap duties on goods from countries that undervalue their currency.

The bill also imposes other punitive measures, such as denying Overseas Private Investment Corp financing, to countries with "fundamentally misaligned currencies" that the Treasury Department has designated for priority action."

Which, at least to me, is a little on the soft side. I think that we should tell the Chinese that they must float the yuan NOW or be subject to across the board to massive/punitive tariffs, potentially an embargo and I'd even go so far as to seize the bonds we owe them.

Of course, I understand that is not going to happen.
 
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michaelr

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The US is a known manipulator. This 'bill' goes nowhere.

Next thing that happens is N Korea gets threatened.
 

jackalope

Former Staff
Jan 2010
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CLIFF STEARNS (R-FL): ‘WE CAN’T COMPETE WITH CHINA’ | Rep. Cliff Stearns (R-FL) doesn’t believe in America’s clean-tech future. “We can’t compete with China to make solar panels and wind turbines,” Stearns told NPR. “He says he doesn’t believe in any type of subsidy for industry. And, he says, where solar is concerned, it makes more sense to invest in research and development on a technology where the U.S. still has a chance of winning.”


UPDATE
Stearns actually sent a letter to Secretary Steven Chu to support Florida Power & Light’s bid for a $200 million in funding for a Smart Grid grant.


UPDATE
The White House responds: “We simply disagree: the answer to this challenge is not to wave the white flag and give up on American workers. America has never declared defeat after a single setback – and we shouldn’t start now.”


UPDATE
Asked by ThinkProgress about Stearns’ comments at the Take Back the American Dream Conference, Sen. Bernie Sanders (I-VT) retorted: “Of course we can compete with China.”

Cliff Stearns (R-FL): ‘We can’t compete with China’ | ThinkProgress

So, Cliff Stearns thinks we can't compete with China? Let's see how he votes on this currency bill.
 

jackalope

Former Staff
Jan 2010
51,139
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Maine
Bill is blocked in the House by Boehner, even thought it has 225 co-sponsors (only need 218 to pass), and a similar bill passed the House last year, 348-79. A 'discharge petition' to force the bill to the floor failed, only getting 175 signatures (needed 218). No Republicans signed the discharge petition.


House Democrats vow further push on China bill | Reuters