Washington: In a development that has increased tension between the United States and China, the US Senate on Monday voted to advance a Bill pressuring China to stop undervaluing its currency. (Agencies)
The Senate vote 79-19 on Monday in favour of a final vote on the proposed Currency Exchange Rate Oversight Reform Act of 2011 as soon as this week.
"Today, we're one step closer to passing a bipartisan Bill that creates jobs and reduces the deficit by cracking down on China's currency manipulation. It's time to stand up for American workers and American manufacturers," said Senator Sherrod Brown, the lead sponsor of the Bill.
"We cannot stand by any longer and watch as our factories close down and entire communities undergo total devastation.
Rhetoric has done little to solve the problem and our manufacturers and workers have paid the price," he said.
"We must equip the Obama Administration with the tools it needs to crack down on China's currency manipulation and help level the playing field for American businesses," Brown said.
"This Bill is part of the effort to get our economy back on track and put Americans back to work. If China stops the practices that artificially tip the scales in its favour, it would support 1.6 million American jobs," Senate Majority Leader Harry Reid said.
"I hope this legislation will motivate China to stop devaluing the yuan on its own. I also know it will send a strong message to the Chinese that America will no longer ignore their blatant, unfair trade practices.
"We expect to wrap up work on China currency legislation this week. We have a lot to get done this month, so the Senate must move quickly," Reid said.
"China is by far the biggest exploiter of predatory currency practices," said Senator Charles Schumer.
"These currency policies artificially raise the price of US exports and suppress the price of imports into the United States, undermining the economic health of American manufacturers and their ability to compete at home and around the globe," he said.
"It has been almost 10 years since China joined the WTO.”
In those 10 years, the Economic Policy Institute estimates that 2.8 million American jobs were lost or displaced in manufacturing and other trade-related industries as a result of increased trade with China and the Chinese government's manipulation of its currency.
"My state of New York has suffered some of the biggest losses, with over 161,000 jobs lost or workers displaced since 2001," Schumer said.
The Bill is intended to give Administration officials additional tools to use if countries fail to take steps to eliminate currency misalignment.
For example, the Bill would prohibit federal procurement of products or services from a country that fails to adopt appropriate polices or take identifiable action to eliminate currency misalignment, Schumer said.
"Our Bill also uses US trade law to counter the economic harm to US manufacturers caused by currency manipulation. The artificially low value of the yuan -- economists estimate that it is anywhere from 20 to 40 per cent less than what it should be -- amounts to a subsidy on Chinese exports and a tariff on imports from the United States and other countries," he said.
"Under existing trade laws, if the Commerce Department and the International Trade Commission find that subsidized imports are causing economic harm to American manufacturers and workers, the administration must impose duties on those imports to offset ("countervail") the benefit conferred on foreign producers and exporters by the government subsidies," Schumer said.
"Commerce (Department) already has authority under US law to investigate whether currency undervaluation by a government provides a countervailing subsidy, although it has failed to do so despite repeated requests to investigate from a wide range of US industries," he said.
Washington: In a development that has increased tension between the United States and China, the US Senate on Monday voted to advance a Bill pressuring China to stop undervaluing its currency.