–Acting Chief of Ways & Means Panel Focuses Slams On China FX
–Rep. Levin: Prefers Multilateral Approach To China FX; No Results Yet
–Rep. Levin: Calls Japanese Currency Intervention ‘Deeply Disturbing’
–Key Republican Rep. Camp: Wrong To Focus ‘Exclusively’ on China FX
–Rep. Camp: Shouldn’t ‘Obsess’ On China Currency; Need Broader Focus

By John Shaw

WASHINGTON (MNI) – Rep. Sander Levin, the acting chairman of the
House Ways and Means Committee, Wednesday unleashed a blistering attack
on the currency policies of both China and Japan, saying they were
pursuing “predatory exchange rate” policies.

In an opening statement during a hearing on China’s currency
policies, Levin directed most of his criticism at China. He said its
“mercantilist policies” include currency manipulation which is acting as
a “drag on U.s. economic growth and job creation.”

“The status quo is unacceptable and unsustainable,” he said.

Levin said the Obama administration must “address directly” China’s
undervalued currency which can be linked to the loss of a million
American jobs and the increase of between $100 billion and $100 billion
in the U.S.’s trade deficit.

Levin said that he strongly prefers multilateral action on China’s
currency, declaring that a global approach is “the most likely to yield
the broadest results.”

But he said that multilateral pressures so far have yielded few
“specific, concrete results.” He said it may be appropriate for Congress
to consider a currency bill soon.

A group of lawmakers is now pushing a bill that would compel
Treasury to report to Congress biannually on what nations have
“fundamentally misaligned currencies” with the U.S.

If those countries, after having been identified by Treasury, do
not address this issue within 90 days, the administration would be
required to take action at the International Monetary Fund and end
federal procurement from these nations.

After 360 days, the US Trade Representative would be required to
request dispute settlement proceedings at the World Trade Organization.

The bill would also make it easier for American firms to request
import duties from the Commerce Department.

Levin also leveled a shot at Japan, accusing it of unfair currency
practices. He called Japan’s intervention in currency markets this week
as a “deeply disturbing development.”

The Japanese Finance Ministry intervened in the foreign exchange
market Wednesday for the first time since March 2004 to counter the
yen’s rise to a fresh 15-year high, news reports said Wednesday.

Rep. Dave Camp, the top Republican on the Ways and Means panel,
also offered tough words on China, but he said lawmakers shouldn’t
“obsess over the value of the RMB.”

“As significant as China’s currency misalignment is, our problems
with China are so much larger,” Camp said.

He said the currency bill that has been introduced in the House and
Senate is “not the best way forward,” adding it “would severely
complicate our ability to deal with even more significant outstanding
Chinese practices” including the proliferation of non-tariff barriers
that prevent U.S. firms from exporting to China.

If Republicans win control of the House, Camp is expected to become
chairman of the Ways and Means Committee which has jurisdiction over
trade policy.

** Market News International Washington Bureau: (202) 371-2121 **

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