The top Republican and Democrat on the Senate Finance Committee plan to offer
a bill next week that addresses concerns about China's currency practices and
other trade irritants in a "constructive" manner, a spokeswoman for one of the
senators said on Wednesday.
Senator Charles Grassley (R-IA) is seen in
Lamoni, Iowa, February 21, 2006. Grassley and Sen. Max Baucus, a Montana
Democrat, 'are working on legislation to respond to major U.S.-China
issues from currency to trade enforcement,' a Grassley spokeswoman said.
[Reuters] |
Committee Chairman Charles
Grassley, an Iowa Republican, and Sen. Max Baucus (news, bio, voting record), a
Montana Democrat, "are working on legislation to respond to major U.S.-China
issues from currency to trade enforcement," a Grassley spokeswoman said.
"This legislation is intended to take a constructive approach to engaging
China and to encourage China to abide by the norms expected of a mature economy
that derives great benefit from an open international trading system," she said,
giving the first details on the bill.
Grassley and Baucus have planned their legislation as an alternative to a
popular, but controversial, bill that threatens China with across-the-board U.S.
tariffs if it does not revalue its currency. The Senate is scheduled to vote on
that measure by March 31, unless its chief sponsors -- who are currently in
China -- agreed to a delay.
China currency's policy is a major irritant in bilateral trade relations.
Many lawmakers and manufacturers believe China deliberately undervalues its
currency by 15 to 40 percent, giving Chinese companies a huge, unfair price
advantage over their American competitors and helping fuel the U.S. trade gap
with China, which hit a record $202 billion last year.
Grassley and Baucus also are "increasingly frustrated with the lack of
progress on China's currency. The Chinese took an initial step last July (toward
revaluing their currency) but they haven't allowed the mechanism they adopted to
operate freely, so the senators' legislation will revisit the issue of currency
exchange rates," the Grassley spokeswoman said.
The authors of the bill threatening China with tariffs -- Sen. Lindsay
Graham, a South Carolina Republican, and Sen. Charles Schumer (news, bio, voting
record), a New York Democrat -- have been in Beijing this week to learn first
hand what China intends to do on the currency issue.
Business groups have warned the Graham-Schumer bill could roil relations with
the United States' third largest trading partner and put Washington in violation
of World Trade Organization rules.
But with the congressional election looming in November, many lawmakers are
anxious to vote for a measure that makes them look tough on China.
"Senators Grassley and Baucus are working to develop and introduce a bill
next week that will garner broad bipartisan support," the Grassley spokeswoman
said.
"The bill also will address congressional concerns regarding enforcement of
U.S. rights under international trade agreements, by focusing efforts to
prioritize and respond to the most significant violations," she added.
"Other elements are under active consideration for the legislation," she
said.