China Currency Bills, Enforcement Discussed at House China Hearing
On October 25, 2011, the House Ways and Means Committee held a hearing on the U.S.-China economic relationship. During the hearing, Administration witnesses testified at the progress being made in the U.S.-China relationship and the challenges that must still be addressed. Committee members questioned whether the Administration supports the current China currency legislation and urged the Administration to make further progress towards making U.S.-China trade fair.
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Administration Says China Challenges Include IPR, Subsidies, Ag Policies, Etc.
Testifying at the hearing were Deputy U.S. Trade Representative Marantis and Treasury Under Secretary for International Affairs Brainard. According to the Deputy USTR, five key challenges in the U.S.-China economic relationship include enforcement of intellectual property rights, problematic industrial and subsidies policies, agriculture policies that are not science-based, investment restrictions, and an opaque legal and regulatory system and weak rule of law.
Administration’s Support for China Currency Bills Questioned Repeatedly
Committee members questioned the witnesses on whether the Administration supports the China currency legislation currently pending in Congress (H.R. 639, S. 1619).
Although Treasury Under Secretary Brainard noted that China's currency remains misaligned despite recent movement and a faster pace of appreciation is needed, she and the Deputy USTR expressed concerns about whether the current China currency bills would be consistent with U.S. international obligations. The Treasury Under Secretary stated that the Administration would continue to work with Congress on the issue.
Treasury Delays Currency Report Until After G20 and APEC Meetings
The Administration witnesses noted that Treasury has announced that its semiannual "Report to Congress on International Economic and Exchange Rate Policies," which was expected in mid-October, would be delayed until after Treasury has had a chance to asses progress following the G20 meetings in October and November and the Asia-Pacific Economic Cooperation (APEC) meetings in November.
(Treasury issued its last report on May 27, 2011 and determined that China was not a currency manipulator, but that the RMB remained undervalued. See ITT’s Online Archives 11053123 for summary of May 27, 2011 report.)
(See ITT’s Online Archives 11061529 for previous statement by Camp that the U.S. should resuscitate BIT negotiations with China. See ITT’s Online Archives 11012126 for summary of U.S.-China 2010 meetings and a commitment to BIT negotiations.)
See ITT’s Online Archives 11101212 for summary of Senate passage of currency bill (S. 1619). See ITT's Online Archives 11021083 for summary on the introduction of House China currency bill (H.R. 639).)
Treasury press release on currency report delay available here