By  on April 8, 2005

WASHINGTON — A bill introduced in the House Thursday would make it easier for U.S. companies to file for relief against subsidized imports from China.

Rep. Duncan Hunter (R., Calif.) and Rep. Tim Ryan (D., Ohio) cosponsored the China Currency Act to address China’s fixed currency rate, which they say contributed to job losses and a record $162 billion trade deficit with China last year.

“We have a situation with a competitor where an illicit subsidy is taking place to the tune of 40 percent, and the idea of doing away with that illicit subsidy — currency manipulation — should appeal to Republicans,” Hunter, chairman of the Armed Services Committee, said at a news conference.

The lawmakers are among critics who maintain China’s fixed currency artificially lowers the price of Chinese goods. Many trade experts and politicians hope that floating the yuan will cause it to rise in value from its current level of 8.28 yuan to the dollar.

Hunter and Ryan said their legislation would “hold China accountable” by declaring currency manipulation illegal under U.S. trade laws. There are a number of China trade-curbing bills pending, but the Bush administration and the GOP-controlled Congress haven’t acted on them.

However, the administration on Monday took an unprecedented step against China when it began a self-initiated review of surging Chinese apparel and textile imports to consider whether to impose temporary safeguard quotas on $624.5 million worth of shipments of certain categories.

The administration has refused to intercede on the currency issue, opting instead to negotiate with the Chinese and prod them into change, and Republican Congressional leaders generally have backed that approach.

Responding to a reporter’s question, Ryan said there is a “good and powerful list” of bipartisan support.

“As far as the administration trying to blow us off, I think there is too much pressure,” he said. “We are starting to see a lot of momentum among small business owners, who are traditionally Republican, and they don’t feel they are getting the help from the White House that they deserve.”

Ryan said the strategy is to build a “grassroots coalition” and that there is current support from the AFL-CIO and U.S. Business and Industry Council.AFL-CIO Secretary Richard Trumka said at the news conference, “We are frustrated and angry at the administration’s refusal to move aggressively on this issue.”

The administration rejected trade cases last year filed by by the AFL-CIO against China, which alleged violation of worker’s rights, and by the China Currency Coalition regarding currency manipulation.

“There is a crisis,” Trumka said. “Our own government has simply failed to insist that China live up to its international obligations with respect to worker’s rights, human rights, currency manipulation and illegal subsidies. We believe the solution to the trade crisis with China requires a bipartisan and multidimensional approach.”

The legislation would define “exchange-rate manipulation” so that a government’s undervaluation of its currency is considered an export subsidy prohibited by World Trade Organization rules and actionable under U.S. trade laws, including the U.S. countervailing duty statute and the U.S. China-specific market-disruption statute.

It also would notably cover countries found to be engaging in exchange-rate manipulation that are nonmarket economies. Under current countervailing duty laws, U.S. companies cannot file cases against countries that are nonmarket economies.

The bill also would provide guidelines for the U.S. International Trade Commission to follow when determining whether currency manipulation had occurred and its impact on the U.S. industry. It also would require the Secretary of Defense to advise the ITC on whether Chinese exports are competitive with U.S. defense manufactured products.

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