Congress seeks to level trade imbalances
Where critics see protectionism, others see hope of more sustainable commerce.
from the June 14, 2007 edition
Page 2 of 3
The political climate
It's unclear whether the growing momentum will result in new laws regarding trade this year. But analysts say that several reasons factors make it a real possibility:
•Since China joined the World Trade Organization early this decade, its exports to the US have dwarfed its imports from the US. Those Chinese exports approached $300 billion last year, compared with US shipments to China of about $55 billion.
•Many new members of Congress, mostly Democrats, arrived in Washington vowing to level the playing field of global trade.
•Patience with the Bush administration is wearing thin. The President and Treasury Secretary Henry Paulson last year launched a "strategic economic dialogue" with China, but so far it has not borne the kind of quick fruit that many lawmakers hoped it would.
All this explains a flurry of trade-related activity on Capitol Hill at a time when Congress is also busy on matters such as Iraq and immigration. One bill introduced Wednesday is backed by two pairs of prominent Senators that had previously been considering rival bills. Sens. Max Baucus (D) of Montana and Chuck Grassley (R) of Iowa joined Charles Schumer (D) of New York and Lindsey Graham (R) of South Carolina to unveil legislation that would prod China to allow its yuan currency to float higher in value.
Meanwhile, Sens. Chris Dodd (D) of Connecticut and Richard Shelby (R) of Alabama said they plan to introduce their own legislation on the issue. Many economists say China has been spending large sums to hold the yuan's value down to promote exports. The moves by lawmakers came as the US Treasury refrained Wednesday from citing China as a currency manipulator in a scheduled report.
The White House is also running into congressional opposition as it seeks approval for a newly negotiated free-trade accord with South Korea.
The House of Representatives is considering its own bipartisan currency bill, and the House Committee on Science and Technology held a hearing Tuesday on the "offshoring" of US jobs. The hearing focused on how global companies are increasingly setting up research and development operations – not just production– in developing nations.
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