12:44 AM
House set to approve bill aimed at China yuan
Addison Ray
By Doug Palmer and Paul Eckert
WASHINGTON | Wed Sep 29, 2010 3:05am EDT
WASHINGTON (Reuters) - The House of Representatives is poised on Wednesday to pass legislation to pressure China to let its yuan currency rise more quickly, fanning the flames of a long-running dispute over trade and jobs.
The House is expected to approve, with bipartisan support, a bill to treat China's exchange rate as a subsidy, opening the door to additional duties on Chinese goods entering the United States, some of which are already subject to special levies.
But the measure must gain Senate approval and be signed into law by President Barack Obama -- by no means a sure bet.
U.S. lawmakers have long brandished the sword of trade retaliation for what they see as China's deliberate policy of undervaluing the yuan, which they say gives its exports an unfair edge in global markets, but have never sent the president any legislation to be signed into law.
President Barack Obama and Chinese Premier Wen Jiabao discussed China's currency and huge trade surplus with the United States during a meeting on the sidelines of the U.N. General Assembly last week, aides said, but declined to discuss the sensitive issues with reporters after the meeting.
The House move, little more than a month before U.S. congressional elections, is certain to further roil relations with Beijing, which resents the criticism and says it is its decision alone how fast to proceed with currency reforms.
In another brewing trade row, more than 180 U.S. lawmakers urged President Barack Obama on Tuesday to fight back against what they called China's "unfair" tactics to spur development of clean energy technologies within its borders.
PATIENCE WEARING THIN
Representative Tim Murphy, a Republican who helped craft the bill, said on Tuesday patience with China has run out.
"We cannot rely on the Chinese government to voluntarily do the right thing. ... The expiration date for appeasement has long since past," Murphy said in a speech predicting the currency bill would pass with bipartisan support.
The White House has not taken a position on the bill, although House Majority Leader Steny Hoyer said lawmakers had worked with the Obama administration to make sure the legislation did not violate World Trade Organization rules.
The outlook for Senate approval is also uncertain, but supporters are pushing for a vote when lawmakers return from November 2 elections.
After holding the yuan steady against the dollar through the financial crisis, Beijing began to allow for an upward drift against the dollar on June 19. It has now risen about 2 percent, far short of what U.S. lawmakers want to see.
U.S. Treasury Secretary Timothy Geithner told Congress two weeks ago the United States would work with other Group of 20 nations to push China to let the yuan strengthen faster.
G20 leaders are set to meet in Seoul November 10-11. That would give U.S. senators time to gauge any further moves from China before deciding what to do with the legislation.