By  on September 26, 2007

WASHINGTON — Democrats in Congress are moving forward on legislation that would penalize Chinese imports if that nation does not let its currency appreciate, and could include product safety measures in the bill.

Rep. Sander Levin (D., Mich.), chairman of the House subcommittee on trade, briefed reporters on a range of issues Tuesday after the House Ways and Means Committee unanimously approved draft legislation on a free trade deal with Peru. He said more Democrats will eventually support the Peru trade deal, despite some opposition. However, Levin warned that pending accords with Colombia, Panama and South Korea face hurdles in Congress.

Regarding China, Levin said it was a "possibility" that Congress will include food and product safety measures in any currency manipulation bill.

"Until now, the emphasis has been on the currency issue, and also on subsidies and some of the WTO [World Trade Organization] decisions that have truly been out of order," he said. "But we'll look at food [and product] safety."

He added that food and product safety measures are complicated because several committees have jurisdiction over them.

"We hope that the shape of a China bill can be determined within the next couple of weeks," Levin said.

The congressman said he hopes to move an omnibus bill aimed at China's currency and trade practices for a House vote before the next installment of the Bush administration's Strategic Economic Dialogue with China in December.

The Senate Finance Committee and Banking, Housing and Urban Affairs Committee have passed competing bills targeting China's currency policies. One proposal would offset currency undervaluation in antidumping duty calculations, and both would require WTO consultations with a country that is found to be manipulating its currency, which could ultimately lead to sanctions.

Levin also said he would circulate a draft bill next week for an overhaul and expansion of the Trade Adjustment Assistance program, which gives federal aid to workers who lose their jobs because of foreign competition. The House was set Tuesday to pass a three-month extension of the trade aid program that expires on Sunday.

Although Levin and Ways and Means chairman Charles Rangel (D., N.Y.), who joined Levin to speak with reporters, believe there is strong support for the trade deal with Peru, both indicated the three other trade deals face challenges.Rangel referred the recent election of Pedro Miguel Gonzalez to be president of Panama's National Assembly. Gonzalez has been indicted in the U.S. in the murder of a U.S. soldier in Panama in 1992 and the attempted murder of another soldier. He was acquitted by a jury in Panama.

"There is an 800-pound gorilla with Panama right in the middle of the living room," he said.

Rangel said the administration must decide in which order the remaining three trade deals will be presented to Congress. If the administration abides by the conventional practice of sending trade accords to Congress in the order in which they were negotiated, Colombia would be next, followed by Panama and South Korea.

There is opposition to the Colombian trade deal on Capitol Hill because of the assassinations of hundreds of union activists in that country, believed to be carried out by paramilitary groups. The trade pact with South Korea faces opposition because of barriers to U.S. exports of beef and autos.

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