The Mitt Romney campaign is airing an ad promising that on his first day in office Romney would “stand up to China” and demand “they play by the rules.” Romney has the opportunity right now to demonstrate that he will live up to these words. He can ask Republicans in Congress to sign a discharge petition to bring up for a vote a currency manipulation bill that 61 of them co-sponsored. It is his own party that is holding this up. So will Romney do it, or is this just more words waiting for the “etch-a-sketch” treatment?
Here is the new Romney ad:
If he means it, all he has to do is ask the 61 Republican co-sponsors of the Currency Reform for Fair Trade Act to ask that the bill they co-sponsored come up for a vote. That is all he has to do. Will he?
Why Is This Important?
What is this currency legislation about, and why is it so important? China has been manipulating its currency rate, holding it well below market value — as much as 30%. What this means is that things made in China cost as much as 30% less than things made elsewhere, before you take any other factors into account. This is 30% before you even look the various subsidies China gives to companies manufacturing in China, This is 35% before you look at how China allows companies to pollute freely. This is 30% before you look at all the other things China is doing!
Steven Capozzola explained in Why Should Congress Pass China Currency Legislation?,
What few seem to understand is that we are already in a trade war with China. It’s not one that we launched, nor one that we wanted. But China’s undervaluation of its currency, which violates world trade rules, is part of a deliberate, well-coordinated strategy to undercut U.S. manufacturers.
Currency manipulation has helped fuel China’s massive rise as a manufacturing powerhouse. And it’s also helped drive our massive trade deficit with Beijing, which reached a record $273 billion in 2010. This huge trade gap has cost 2.8 million U.S. jobs over the past decade—jobs in every state and congressional district, jobs in manufacturing, jobs in high-tech sectors… It’s a terribly one-sided trade relationship.
How did this happen? China intervenes in the currency market to buy dollars and set its own currency at an artificially low exchange rate. This makes Chinese goods 40% cheaper when entering the U.S. market while making our goods significantly more costly when exported to China.
… This is a bipartisan issue, one that marks a clear chance for Congress to stand up to a very protectionist, predatory campaign. China can purchase dollars, which are freely traded, in order to set its currency peg. But conversely, it is illegal to buy China’s closely held currency.
What Is This “Discharge Petition” About?
To address this (and other) currency manipulation the Senate passed a bill requiring our government to act against countries that manipulate their currency. This bill is waiting for the House to act because Speaker Boehner will not allow it to come to the floor for a vote.
The House has a procedure for forcing a bill to come to the floor when House leadership is blocking a vote. This is called a Discharge Petition. If enough Representatives sign a discharge petition it must be brought up for a vote. There are 61 Republican members of the House of Representatives who co-sponsored legislation to confront China over their currency manipulation: Currency Reform for Fair Trade Act (HR639). If enough of them (here is a list) sign the discharge petition it has to be voted on, and it will pass.
61 House Republicans … had co-sponsored the China currency bill, but who now side with China by refusing to help force a vote on the bill. The bill has passed the Senate and Republican leaders are refusing to allow a vote in the House. This bill means jobs. This bill means confronting China over their trade cheating. Call these members of Congress and demand that they side with American workers instead of China.
[. . .] The Club For Growth, a Wall Street front-group that backs China’s positions on these issues, has demanded that Republicans side with China on this, and has called it a “litmus test.” One Republican who actually did sign the discharge petition to force the House to vote, Harold Rogers, was forced by House leadership to remove his name!
So if Romney is serious, there is something he can do without waiting for the election: tell House Republicans to bring the bill to the floor for a vote.
For homework see: China Currency Fight In Congress.