By and  on September 18, 2007

WASHINGTON — Lawmakers are ratcheting up the pressure to pass legislation cracking down on China's undervalued currency and contaminated products this fall, leaving a large swath of the fashion industry on guard over punitive legislation.

Congress returned from summer recess at the beginning of the month amid a new round of product recalls of lead-tainted toys by Mattel and facing unfinished business on punishing China's undervalued currency.

Trade veterans are still trying to determine whether Congress will have enough time left on the legislative calendar to craft and pass product safety legislation and a separate bill targeting undervalued currencies, notably from China, with punitive tariffs.

There is a growing consensus inside the Beltway that Congress will take up product safety legislation before it considers a currency bill, in light of the recent scare and recalls over contaminated products from China.

Tainted toys and food resonate with constituents and voters, making legislation aimed at overhauling regulatory agencies, beefing up import enforcement and increasing fines against repeat offenders popular among lawmakers from both sides of the aisle.

"I see a product safety legislation moving most quickly because product safety is an issue that members view as constituent-driven," said Brenda Jacobs, counsel for the U.S. Association of Importers of Textiles & Apparel. "I think things like currency are far more abstract. It is not a consumer issue in the same way that product safety appears to be."

Jacobs said she does not believe Democratic leaders will abandon their efforts to pass a currency bill tied to U.S. trade remedies, but she said it could potentially be put off until next year.

"Congress is not going to walk away from [currency] legislation, but they haven't drafted all of the bills yet and they have a lot of issues to reconcile before they move forward," Jacobs added.

The controversy over imports of contaminated Chinese consumer products has sparked an outcry on Capitol Hill and led to hearings, investigations, legislation and an interagency task force created by the Bush administration.

President Bush raised the dual topics of currency imbalances and the recent rash of recalls of contaminated and defective Chinese imports with Chinese President Hu Jintao in a meeting on Sept. 6 in Sydney. The two leaders were attending the Asia-Pacific Economic Cooperation forum.

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