–Key Republican Senator Says China Must Get On Forex Reform ‘Path’
–Bipartisan Support To End Manipulation, Cld Pass Bill in Floor Vote
–Treasury Declines To Testify on China’s Currency Policies

By John Shaw

WASHINGTON (MNI) – Sen. Lindsey Graham, a key Republican critic of
China’s currency policies, said Thursday there is strong bipartisan
support for legislation that would allow the U.S. to pressure nations
that use misaligned currencies to dominate the global trading system.

In testimony before a subcommittee of the Senate Banking Committee,
Graham said it was time for Congress to pass the currency bill that he
has drafted with Democratic Sen. Charles Schumer and others.

“The time is long overdue to act,” Graham said. “We’d get 80 or 90
votes if we could get this sucker on the floor.”

The Republican senator said that while the legislation is not
China-specific, it is the currency practices of this nation that
lawmakers are most concerned about.

“Stop cheating is all we’re asking,” Graham said.

Under the bill drafted by Graham and Schumer, a determination by
Treasury that China’s currency was misaligned could result in a finding
by the Commerce Department that this constituted an illegal subsidy.
This could lead to the imposition of countervailing duties on Chinese
imports on a product-specific basis.

Graham said he wants China to take a steady “path” toward revaluing
its currency, but added that he is skeptical this will occur without
political pressure from the United States and others.

He said an earlier move by China to reform its currency stopped in
2008 when political pressure from the U.S. waned.

Graham said the overall U.S. relationship with China will not
strengthen until China’s currency is reformed.

“I’m glad they are doing well, but not at our expense,” he said,
arguing that its currency policy is a big factor in its huge trade
surpluses.

Sen. Sherrod Brown, chairman of the Banking panel’s Economic Policy
subcommittee, said he invited Treasury to send someone to testify to the
hearing, but senior officials declined.

Brown noted that Treasury officials are taking part in many other
events in Washington this week. The Group of Seven and Group of 20
finance ministers and central bank governors will meet Thursday and
Friday ahead of the Spring meetings of the International Monetary Fund
and World Bank over the weekend.

The Banking subcommittee is hearing from representatives of
manufacturing firms and several think tank analysts.

The Senate Finance and Banking panels passed separate currency
bills in the summer of 2007, but neither of those bills ever made it to
the Senate floor.

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

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