Romney would squeeze China on forex manipulation: adviser

Reuters News
|
Posted: Mar 27, 2012 1:13 PM
Romney would squeeze China on forex manipulation: adviser

WASHINGTON (Reuters) - Republican presidential candidate Mitt Romney is looking at ways to increase pressure on China over what he sees as currency manipulation and unfair subsidy practices, a Romney campaign adviser said on Tuesday.

"I think he wants to maximize the pressure," former U.S. Commerce Under Secretary for International Trade Grant Aldonas said at a symposium on the future of U.S. manufacturing. Aldonas served at Commerce from 2001 to 2003 under Republican former president George W. Bush.

Romney, the front-runner in the Republican race to challenge President Barack Obama for the White House, has promised to quickly label China a currency manipulator, something the Obama administration has six times declined to do.

That would set the stage, under Romney's plan, for the United States to impose countervailing duties on Chinese goods to offset the subsidy advantage of China's undervalued currency.

Last year, the Democratic-controlled Senate passed legislation to do essentially the same thing.

The measure has stalled in the Republican-controlled House of Representatives, where leaders say they fear it could start a trade war, and the Obama administration has not pushed for a House vote on the currency bill.

The U.S. Treasury Department on April 15 faces a semi-annual deadline to declare whether any country is manipulating its currency for an unfair trade advantage. The department, under both Democratic and Republican administrations, has not cited any country since 1994, when China was last named.

Asked if Romney was serious about declaring China a currency manipulator, Aldonas answered: "He is."

Aldonas said he would convey a questioner's suggestion back to the campaign that Romney prove his seriousness by urging House Ways and Mean Committee Chairman Dave Camp, a Michigan Republican, to take up the currency bill.

However, the former top Commerce Department official said any currency legislation should also address broader subsidy practices that encourage Chinese companies to build excess production capacity that "spills into our market."

"So, I'd love to see Dave Camp add something to that bill, which is not just currency but actually goes after the subsidies that bring the excess capacity on the market and actually affects our producers," he said.

(Reporting By Doug Palmer; editing by Todd Eastham)