The Democratic-controlled Congress, intent on recasting the trade agenda, headed into a monthlong recess last week after setting measures in motion that could set punitive tariffs on Chinese imports if the country doesn't revalue its currency.
WASHINGTON — The Democratic-controlled Congress, intent on recasting the trade agenda, headed into a monthlong recess last week after setting measures in motion that could set punitive tariffs on Chinese imports if the country doesn't revalue its currency.
The flurry of activity on the China currency issue signaled where the collective focus of lawmakers will be when they return from their summer break in early September.
The new lens on trade has left retail and wholesale apparel importers anxious, while giving some hope to textile producers seeking a slowdown to the aggressive push by the Bush administration for more trade pacts.
Trade experts are unsure what the Democrats, who have solid support from many Republicans on the China currency issue, will try to get enacted into law this year. Jurisdictional disputes over legislation targeting currency manipulation and other trade matters, and the looming presidential election process make it difficult to predict what course legislators will take.
"There is a difference of opinion on those questions in this institute," said Gary Hufbauer, senior fellow at the Peterson Institute for International Economics.
While Hufbauer believes the Democratic leadership will successfully pass China currency legislation this year, he said other experts within Peterson don't agree. They believe "that turf jostling [between committees] is one reason for a delay and the other reason would be that Democrats will try to keep the issue alive to put pressure on the administration into next year, and that may be a more powerful reason," said Hufbauer.
In addition, he expects Congressional consideration of four trade deals — with Peru, Colombia, Panama and South Korea — to be pushed back until next spring.
"In the preheated [presidential] primary time, the signs don't seem quite right, now," Hufbauer said.
The House held a hearing on Thursday to discuss several competing bills targeting China's currency policies as the chamber continues to try to build a consensus for moving its own legislation forward. This followed the Senate Finance Committee and the Senate Banking, Housing and Urban Affairs Committee passing separate bills in the last two weeks targeting currency manipulation by China and other countries.
In the Senate, the committee chairmen will have to find a compromise between their two bills. The House is further behind on the currency issue, but leaders appeared ready to take some action to move the ball forward, although the timetable is unclear.
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