A bipartisan group of senators has introduced legislation that would require the Treasury Department to identify and crack down on countries like China that manipulate their currency to gain a competitive edge.
Republican Sens. Jeff Sessions of Alabama, Lindsey Graham of South Carolina, Olympia Snowe of Maine, and Richard Burr of North Carolina were among at least 20 senators signing onto the bill authored by Democratic Sens. Sherrod Brown of Ohio and Chuck Schumer of New York.
The Currency Exchange Rate Oversight Reform Act of 2011, unveiled on Thursday, combines elements of legislation introduced in previous Congresses by both Snowe and Graham, as well as other Republicans in the House.
“Free trade must operate under a set of rules and principles. China’s currency manipulation offends that core idea, and it harms American workers and shutters American factories at a time when we can least afford it,” said Sessions, the ranking Republican on Senate Budget Committee. “U.S. authorities should negotiate on behalf of American workers — not against them. We must defend American interests. That we have not done so is further proof of what’s wrong with Washington.”
American businesses have long accused China of manipulating its currency exchange rate to give its exports and unfair advantage on the world market.
According to the Alliance for American Manufacturing, some 2.8 million U.S. jobs have been lost to China over the past decade because its currency manipulation amounts to an unfair export subsidy.
A report in June from the Economic Policy Institute estimated that if the Chinese yuan and satellite currencies were revalued correctly, it would create an estimated 2.25 million jobs through an increase in U.S. gross domestic product.
Under the bill, the Treasury Department would have the authority to launch investigations and take action to counter currency manipulation through a number of channels — including U.S. trade adjustments, consultation with the Federal Reserve, and formal complaints to the World Trade Organization and International Monetary Fund.
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