WASHINGTON The odds for Senate action on a bill to get tough on China's currency practices improved after a bipartisan vote last week in the House of Representatives, proponents said on Thursday.
Many U.S. lawmakers believe China deliberately undervalues its yuan currency by 25 percent to 40 percent, giving its exporters an unfair price advantage.
"There's very little time and a lot of other things on the agenda ... but we'll do our best and see what emerges," said Charlie Blum, executive director of the Fair Currency Coalition, an association of steel, textile and labor groups that have pressed Congress for years on the issue.
Beijing has warned that the bill approved in the House by a lopsided margin of 348-79 -- just before lawmakers went home to campaign for the November 2 elections -- would damage U.S.-China relations if it were to ever become law.
However, there are several strong supporters of action in the Senate, including Senator Charles Schumer, a New York Democrat, who have been looking all year for an opportunity to bring a bill to the floor for a vote.
China's policy of keeping tight controls on the yuan will be a topic of debate as finance officials from around the globe gather in Washington for meetings of the International Monetary Fund and World Bank that kick off on Friday.
In June, China loosened its currency from a peg to the dollar and since then it has risen around 2 percent.
The House bill authorizes the Commerce Department to treat currency undervaluation as a subsidy and to apply countervailing duties to offset the price advantage.
Critics warn the bill exposes U.S. companies and farmers to retaliatory measures from Beijing. Defenders say it is a modest piece of legislation that would allow U.S. manufacturers on a case-by-case basis to get import relief if they can prove they have been injured by China's currency practices.
Blum, during a panel discussions on prospects for the legislation, said supporters of the bill learned from their efforts in the House and were already preparing to make a push in the Senate when lawmakers return for an expected brief post-election session.
One possibility is that Schumer and other proponents of action would offer their bill as an amendment to a larger piece of legislation to fund government operations.
If successful, that would set the stage for any differences between the House and Senate approaches to be worked out in a legislative conference between the two chambers.
Swift action would be needed because the House bill will die if does not become law before the end of the year. Supporters would then have to restart the legislative process all over again when the new Congress is seated next year.
Gary Horlick, a trade lawyer who believes the House bill would be declared illegal under WTO rules, said the Senate faces a long list of possible legislation when it returns.
Whether it votes on a China currency bill probably depends "on what China does" in terms of allowing its exchange rate to continue to rise, Horlick said.
Many think China could try to head off Senate action by allowing its exchange rate to rise more rapidly in the weeks leading up to a November 10-11 meeting of leaders from the Group of 20 nations in South Korea, which is just about a week or so before the U.S. Congress is due to reconvene.