The US Senate vote to push forward debate on a bill that would punish China over its undervalued currency has run into obstacles as both US House Speaker John Boehner and the White House have aired doubts about the bill.
On Tuesday, Boehner warned it was "dangerous" to approve such a bill to deal with China’s currency policy. "It’s a pretty dangerous thing to be moving legislation through the U.S. Congress forcing someone to deal with the value of a currency," Boehner remarked. "This is well beyond, I think, what the Congress ought to be doing… While I've got concerns about how the Chinese have dealt with their currency, I'm not sure this is the way to fix it." The speaker has the power to decide whether to permit a vote on the bill.
Senate Republicans have sought to make it more difficult for unilateral US action, which China warned would trigger a trade war. The Obama administration said it was reviewing the bill to make sure it adheres to global trade obligations.
Report: Boehner on China Bill: ‘A Dangerous Thing’ (Wall Street Journal, 5 Oct 2011)
Report: U.S. Legislation Targeting China Yuan Hits Republican Opposition (Bloomberg, 5 Oct 2011)
Report: Boehner fires first Republican salvo at Obama's yuan Bill (Today, 6 Oct 2011)
Meanwhile, the White House has voiced concerns that the bill will infringe upon international trade rules.
"Aspects of this legislation do, however, raise concerns about consistency with our international obligations, and we are in the process of discussing those issues with members of Congress," Jay Carney, White House spokesman, said on Wednesday.
"We have, from the beginning as an administration, worked on the issue of the undervalued Chinese currency. And it has appreciated to some degree as a result, we think, of those efforts. More needs to be done," Carney added.
Many trade lawyers insist that the currency stipulations in the bill would be faulted as illegitimate if challenged at the World Trade Organisation. While the bill applies to all US trading partners, its advocates have made clear that it is mainly targeting China.
Democratic Senator Sherrod Brown, one of the bill’s authors, said he was sure the Democrat-controlled Senate would approve the bill with marginal opposition. "This bill doesn't cost taxpayer dollars. It actually will help reduce the budget deficit, so ... other than those who want to stand with companies that outsource jobs to China, I don't see where any real opposition to this bill should come from," Brown said.
The bill would then go to the House of Representatives, where it will face a bigger challenge given Boehner’s statement.
Report: White House voices concern on China currency bill (Reuters, 5 Oct 2011)
Report: White House voices concern over currency bill (Financial Times, 5 Oct 2011)