* Boehner restates opposition to currency bill
* Speaker could stifle House debate
* China denounces protectionist move
WASHINGTON, Oct 12 Legislation designed to press China to
let its currency rise in value poses a "very severe risk" of a trade war
and should not be taken up by the U.S. Congress, House of Representatives
Speaker John Boehner said on Wednesday, a day after the bill passed the
Boehner, the top Republican in Congress, has consistently
voiced opposition to the measure, which would allow the U.S.
government to slap countervailing duties on products from
countries found to be subsidizing their exports by undervaluing
"I think, given the volatility in the world markets, given
the uncertainty about the world economy, for the Congress of
the United States to be taking this step at this moment in time
poses a very severe risk of a trade war and unintended
consequences that could come as a result," he told reporters.
"I understand that people are concerned about the value of
China's currency. I'm concerned about it as well," said
"What I don't believe is appropriate is for the Congress of
the United States to take this issue up and to do it within a
legislative form," he added.
Following a week of debate, the Democratic Party-controlled
Senate approved the bill in a 63-35 vote on Tuesday and sent it
to House of Representatives, where the traditionally
pro-free-trade Republicans hold a majority.
Boehner's opposition could kill the bill before any House
debate, but supporters are trying to rally colleagues behind a
legislative tactic that would force him to bring up the
Chinese Foreign Ministry spokesman Ma Zhaoxu on Wednesday
called the bill a protectionist step that "gravely violates
World Trade Organization rules."
"China urges the U.S. government, Congress and all quarters
to resolutely oppose using domestic legislation to create a
fuss about and put pressure on the renminbi exchange rate,"
said Ma in comments on the ministry's website (www.mfa.gov.cn).
Chinese officials and media have warned that the
legislation could trigger a "trade war" of escalating
protectionist tit-for-tat retaliation.
Mostly Democratic supporters of the bill, alarmed at high
unemployment a year before congressional and presidential
elections expected to focus on the economy, say China's yuan
policy already amounts to a trade war that has decimated the
U.S. industrial base with artificially cheap products.
Charles Schumer, the No. 3 Democrat in the Senate and a
longtime critic of China's yuan policy, predicted that the
House would pass some form of China currency legislation due to
pressure from rank-and-file Republican members.
"I think there's going to be huge pressure in the House by
House Republicans, many of whom are from the Middle West and
the South, to do something on China currency other than do
nothing," said Schumer.
A second Republican leader, chairman Dave Camp of the House
Ways and Means Committee, said he would hold a hearing on
currency, intellectual property rights and other trade issues
with China this month.
"We have a complex relationship with China, an important
relationship with China," Camp said.
Many U.S. economists say China holds down the value of its
yuan to give its exporters an edge in global markets. China
says it is committed to gradual currency reform and notes that
the yuan has risen 30 percent against the dollar since 2005.