The Week Congress Began to Challenge China

[Omaha Steve]

http://blog.usw.org/2010/09/20/the-week-congress-began-to-challenge-china/

Posted September 20, 2010 at 5:38 pm, in From Alliance for American Manufacturing


Scott N. Paul

By Scott Paul
Executive Director, Alliance for American Manufacturing

What a difference a week makes. Just last week, the Beijing government and outsourcers thought they could run out the clock and avoid a long overdue legislative reckoning on China’s currency manipulation, which serves as a drag on global growth, a siphon for American jobs and wealth, and an inflator of dangerous imbalances in the world economy.

But following a rapid succession of events this week, Congressional action on China’s cheating looks increasingly likely. The chances for passage of a bipartisan bill in Congress that would deter China from manipulating its currency have improved dramatically.

Let’s review the week’s developments:

* H.R. 2378, the Tim Ryan (D-OH)-Tim Murphy (R-PA) bill on currency, gained 16 new cosponsors, including key members of the Ways and Means Committee. Meanwhile, about 100 Members of Congress–including more than 30 Republicans–urged the Speaker to schedule the bill for a vote.

* In testimony before House and Senate committees on Thursday, Treasury Secretary Timothy Geithner took a much harder line on China than he had just three months ago.

* House Speaker Nancy Pelosi told CNBC’s John Harwood that she supported bringing legislation to the floor, provided that it is compliant with global trade rules. (Testimony given at a hearing on Wednesday left little doubt that the legislation is, in fact, on solid legal ground.)

* The Economic Policy Institute estimated that ending China’s currency manipulation could add as much 1.4 percent to economic growth in the U.S., based on calculations made by Nobel laureate Paul Krugman. That would lead to $500 billion in additional revenue–or deficit reduction.

* Even the Chinese government got into the act, raising the value of its currency, the Yuan, to a new high against the dollar, definitively proving that it (a) manipulates the exchange rate, and (b) responds to political pressure from the U.S.

So what will next week bring? Predictions of trade wars, arguments for inaction or quiet diplomacy, and ridiculous defenses of Beijing’s mercantilism. We’ll look forward to tackling those myths one day at a time. Stay tuned.

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Prior to forming the Alliance for American Manufacturing (AAM), Scott Paul was the principal lobbyist for the Industrial Union Council and was a trade lobbyist at the AFL-CIO, where he led the labor movement’s legislative initiatives on international trade, manufacturing, and foreign policy issues. Mr. Paul’s Capitol Hill experience extends from 1987, when he held an internship with Senator Richard G. Lugar (R-IN), to 2001, and when he served as the chief foreign policy and trade advisor to then-House Democratic Whip David E. Bonior (D-MI). He also served on the staff of the late Rep. Jim Jontz (D-IN) and former Rep. Peter Barca (D-WI).

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This piece was first published on The Huffington Post.

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Follow Scott Paul on Twitter: www.twitter.com/ScottPaulAAM