UPDATE 4-US lawmakers renew drive for China currency bill
* Senator says legislation needed to get China to act
* Bill would consider yuan a subsidized currency
* Obama aides says US will press China on currency at G20 (Recasts with lawmaker comments)
By Doug Palmer and Paul Eckert
WASHINGTON, June 23 (Reuters) - U.S. lawmakers on Wednesday dismissed China's recent step toward a more flexible currency policy as too little too late and said they would pursue legislation to press Beijing for more significant reform.
"Nothing ever changes unless you force China to act," Senator Charles Schumer said at a hearing where lawmakers also urged top Obama officials not to let up pressure on Beijing.
The New York Democrat said he other senators who believed China's currency policy gives it an unfair trade advantage were determined to get a Senate vote soon on their bill that would consider the undervalued yuan a subsidized currency.
"We are not placated by these public pronouncements. We want action ... The Chinese will keep treating us like they have us on a yo-yo unless we make a serious push for our legislation," Schumer said.
Senate Finance Committee Chairman Max Baucus, a Montana Democrat, said he also believed China was moving too slowly and planned to dust off a bill he crafted several years ago to give the White House new tools to deal with the issue.
For full coverage of yuan policy, click [ID:nTOPNOW3]
The congressional backlash raises the temperature for this weekend's meeting in Toronto between President Barack Obama, Chinese President Hu Jintao and other leaders of the Group of 20 leading developed and developing nations.
Under pressure from the United States and other trading partners, China announced on Saturday that it was ditching a two-year peg to the dollar to allow more flexibility in its closely-managed exchange rate.
The Obama administration welcomed the action, but many members of Congress complained that China's currency remained undervalued by 25 percent to 40 percent.
They argue that this gives Chinese companies a huge price advantage and also blame the currency policy for the huge trade deficit with China and lost U.S. manufacturing jobs.
U.S. Commerce Secretary Gary Locke and U.S. Trade Representative Ron Kirk assured the committee Obama would press Hu on the currency issue at the G20 meeting.
"There's no disagreement that it's absolutely crucial for appreciation to occur," Locke said.
Lawmakers in the U.S. House of Representatives also said they would push for legislation to deal with the yuan.
"America cannot keep relying on more empty promises from China," Representative Tim Murphy, a Republican, said at a rally with labor and manufacturing groups.
A common feature of most of the bills is a provision that would require the Commerce Department to treat "undervalued" currencies as a subsidy under U.S. trade law.
That would allow U.S. manufacturers to request, on a case-by-case basis, a "countervailing duty" on Chinese goods that benefit from the exchange rate.
Many lawmakers insist the Commerce Department already has the authority to take that step, and department officials have been weighing whether to investigate if China's exchange rate can in fact be treated as a subsidy.
"Given the scrutiny that such decisions face in U.S. courts and at the WTO, I want to make sure our decision on whether to investigate is warranted by the facts and the law," Locke told the panel, referring to the World Trade Organization.
Baucus, Schumer and other senators pressed Locke for a quick decision on that issue in two cases now before the department involving paper and aluminum products from China.
The lawmakers also urged Locke and Kirk to take stronger action on a spate of other Chinese trade concerns, including rampant piracy of U.S. business software, music and movies and the counterfeiting of a long list of American products.
Kirk said he hoped for progress on several trade irritants by a meeting of the U.S.-China Joint Commission on Commerce and Trade near the end of this year.
But Washington is prepared to go to the World Trade Organization or take other enforcement actions "when dialogue fails," Kirk said.
Locke, who led a group of U.S. clean energy companies on a trade mission to China last month, voiced concern China was backsliding on its commitment to market openness.
"Far more needs to be done before we can be sure that commercial trends affecting U.S. business in China are once again headed in the right direction," Locke said.
But China has taken some steps to address U.S. concerns about "indigenous innovation" policies that discriminate against foreign firms, he said. (Editing by Anthony Boadle)
- Tweet this
- Share this
- Digg this