The Week Congress Began to Challenge China
What a difference a week makes. Just last week, the Beijing government and outsourcers thought they could run out the clock and avoid a long overdue legislative reckoning on China's currency manipulation, which serves as a drag on global growth, a siphon for American jobs and wealth, and an inflator of dangerous imbalances in the world economy.
But following a rapid succession of events this week, Congressional action on China's cheating looks increasingly likely. The chances for passage of a bipartisan bill in Congress that would deter China from manipulating its currency have improved dramatically.
Let's review the week's developments:
- H.R. 2378, the Tim Ryan (D-OH)-Tim Murphy (R-PA) bill on currency, gained 16 new cosponsors, including key members of the Ways and Means Committee. Meanwhile, about 100 Members of Congress--including more than 30 Republicans--urged the Speaker to schedule the bill for a vote.
- In testimony before House and Senate committees on Thursday, Treasury Secretary Timothy Geithner took a much harder line on China than he had just three months ago.
- House Speaker Nancy Pelosi told CNBC's John Harwood that she supported bringing legislation to the floor, provided that it is compliant with global trade rules. (Testimony given at a hearing on Wednesday left little doubt that the legislation is, in fact, on solid legal ground.)
- The Economic Policy Institute estimated that ending China's currency manipulation could add as much 1.4 percent to economic growth in the U.S., based on calculations made by Nobel laureate Paul Krugman. That would lead to $500 billion in additional revenue--or deficit reduction.
- Even the Chinese government got into the act, raising the value of its currency, the Yuan, to a new high against the dollar, definitively proving that it (a) manipulates the exchange rate, and (b) responds to political pressure from the U.S.
So what will next week bring? Predictions of trade wars, arguments for inaction or quiet diplomacy, and ridiculous defenses of Beijing's mercantilism. We'll look forward to tackling those myths one day at a time. Stay tuned.
Cross-posted on The Huffington Post.
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This administration only can
This administration only can suggest tying our country to more economic Globalization, by increasing debt borrowing money to create temporary jobs until foreign manufacturing can again carry us on their coat tails with more store clerk jobs. Green is now a dirty word in America again.
Going green with national legislation for ballast water would help the American manufacturing industry compete, by eliminating a pass to a foreign economic industry, which allows them to pollute freely, our waters and air while delivering their goods. We need national comprehensive enforcement of shipping pollution.
Ballast water can not be properly addressed as the national security issue it is, as long as our country pursues a course of economic globalization moving foreign manufactured goods into our country with a dirty water trail , carbon footprint for transportation and hidden carbon in manufacturing. If our country created comprehensive national ballast water legislation calling for mandatory equipment under a mission of enforcement ,directed by the Coast Guard, rather than incentives for foreign ships that decide to take the step, it would have a ripple affect in saving human life around the world, as IMO sea captains may be more inclined to use technology if it were on board, while in counties without any way to enforce the ineffective,dangerous,costly ocean flush. Waterborne disease in third world countries that rely on the sea for their food, could be curtailed, charity money for vaccines and medicine would have greater impact as needless illness could be prevented. As these would be primarily foreign ships to incur the cost, mentioned in a report prepared for congress in 2009 about ballast water,--- one year after the largest elected legislative voice of the people,---after much study,--- voted historically 395-7,- it will be quite interesting to see how a study prepared by "Advisors to the Nation on Science, Engineering and Medicine" feel in their "new" study for "change". Hopefully they will weigh the effects hurting our country more than those that hurt foreign ships and the economic interest of foreign imports. To use the phrase economic globalization is giving the concept of producing and moving goods around the world for global economic development of 3rd world countries, more a place of respect as a concept than it is. Globalization of ideas, culture, education are great to help eliminate misunderstandings and exchange of knowledge, but the plan that boosting foreign economies, helping them develop strong exporting economies,using low environmental standards, hiding emission, while paying workers pennies, at the expense of jobs for our country and environment is no more than the results of two decades of political dynasty’s using, it as a way to create revenue for their political origins and their agendas. Unfortunately as the Vice President eluded, this administrations policy is no more than we have had, other than while these three, previous Senators decided which job they would take, as they allowed one Senator from their party to kill historic legislation passed 395-7, now over two years later we still have nothing. This policy continues today, while putting the foundations of our countries core values and economy in peril, by interlacement of our free economic beliefs with a communist countries controlled economic policy. They control the size of their middle class work force, to manipulate their position and currency value in the economic world, for the benefit of a privileged few. To be dependent on a country to support our currency so our politicians can offer entitlements for votes, when the country we depend on, dose not have an ideology that supports any of our values, is allowing them to have a indirect say in our political process. (We can never be considered a free country as long as another country holds our purse strings) In other words the impact on peoples life through a policy of ECONOMIC globalization is about greed, rather than understanding. Our country with it diverse population, is already an experiment of cultural Globalization, that currently can not supply enough jobs for its own people. We need national ballast water to be considered as the law of the land, not, a non-transparent military plan pursued by the current commander and chief subject to change, or as the International Law of the Sea.
The following is from a report prepared for congress in DEC 2009
“Although estimates of the costs of ballast treatment may be imprecise and vary from vessel to
vessel, there is some general agreement on average costs.14 For example, it may cost an estimated
$400,000 per vessel for modification of container/bulk vessels to use onshore ballast water
treatment facilities at California ports. More generally, the cost of retrofitting vessels to treat
ballast water has been estimated at between $200,000 and $310,000 per vessel for mechanical
treatment and around $300,000 for chemical treatment.15 Most of this expense will be borne by
foreign shipping companies, as the U.S. flag fleet is a small percentage of the global fleet,16 and
likely passed along to consumers of products imported on these ships.”