Currency legislation in the U.S. Senate: A legal trade bill
Business and labor groups have praised the measure. But the bill has drawn criticism in some quarters.
To set the record straight, here are some simple facts on S. 1619, the Currency Exchange Rate Oversight Reform Act of 2011, which would provide recourse for U.S. manufacturers who have been adversely affected by China's undervalued currency.
Won’t this bill start a trade war?
No. It brings honesty to a currency report and establishes a process, one recognized under international trade rules, for U.S. businesses to seek relief from dumped or subsidized Chinese goods. There are no across-the-board tariffs or other restrictions on access to our market. But, if China is manipulating its currency, it could face consequences in a manner consistent with our trade laws.
The Administration has concerns about the bill, right?
Actually, the Administration's only stated concern is whether the bill is compliant with our trade obligations. The bill was specifically written to conform to America's WTO obligations. In fact, listening to the President, it sounds like he agrees with the thrust of the effort.
Does this raise tariffs on Chinese goods right away?
No, it merely provides a process for U.S. manufacturers to file trade cases alleging an adverse impact from currency manipulation.
So what happens next?
If/when the Senate passes the bill, it will be up to the House.
Hasn’t Speaker Boehner said that it is dead?
In the House, the bill has 60 Republican cosponsors. 99 Republicans voted for it in the last Congress. As national polling shows, 86% of all voters (including Republicans) support action on China's trade practices. Industrial state Republicans in swing districts will start calling for such a bill. If this bill came to a vote in the House, it would pass with close to 300 votes, if not more. It received 347 in the last Congress. Plus, Rep. Boehner’s Republican Senator from Ohio, Rob Portman, a former Bush USTR, supported it, so he really has no excuse now.
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