Apr 07 2005

Graham’s China Currency Bill to Get Senate Floor Vote

WASHINGTON – U.S. Senators Lindsey Graham’s (R-South Carolina) and Charles Schumer’s (D-New York) work over the past two years trying to get China to stop manipulating its currency received a major boost today when the pair announced the Republican and Democratic leadership in the Senate had agreed to a floor vote on their legislation. “Getting a straight up-or-down vote on our bill is what we have wanted all along,” said Graham. “China needs to reform its trade practices or suffer serious reprisals. For two years, I’ve been telling China it’s time to transition to a market-based currency. The Senate’s vote was the most positive step in years when it comes to reforming Chinese trade practices.” The issue was brought to a head when Graham and Schumer offered their legislation as an amendment to the Foreign Affairs Authorization Act. A procedural motion to table the amendment was brought forward and soundly defeated in a bipartisan 67-33 vote, a majority of Republicans and Democrats opposed the measure. Graham and Schumer then worked with the leadership in both parties to come to a written agreement on timing of a straight up-or-down vote on their free-standing bill, S. 295, no later than July 27. The pair then agreed to withdraw their amendment. The bill calls for a 180-day negotiation period between the United States and China to revalue its currency. If the negotiations are not successful, a temporary across the board tariff of 27.5 percent would be applied to all Chinese products entering the United States. If the President determines at the end of the negotiation period China has developed and started actual implementation of a plan to revalue its currency, he may delay imposition of the tariff for another twelve months. “Two-thirds of the Senate expressed displeasure with Chinese trade practices,” said Graham. “If China wants to be part of the international community, it’s time for them to clean up their act. Until they start playing by the rules, our manufacturing industry will continue to bleed jobs because of unfair Chinese trade practices.” The yuan -- sometimes known as renminbi -- has been tightly pegged to the U.S. dollar since 1994 (approximately 8.28 Yuan to the dollar). If China’s currency freely floated in the market, as is the case with virtually all major world currencies, it would have appreciated substantially. “I appreciate the efforts of the Bush Administration to move the Chinese to a market based currency,” said Graham. “I think our effort in the Senate will be helpful in that endeavor.” #####