WASHINGTON — On Monday, it was Sen. Olympia Snowe of Maine taking to the Senate floor to make the case for a bill aimed at penalizing China for undervaluing its currency.
On Tuesday, it was Rep. Mike Michaud, D-2nd District, arguing at a Capitol Hill news conference that the House should reject trade agreements with South Korea, Colombia and Panama.
In a week when international trade issues are occupying a central spot in the Capitol Hill debate, the two Maine lawmakers are front and center. Snowe is a co-author, with Democratic Sen. Sherrod Brown of Ohio, of a key part of the China currency-manipulation legislation.
Their provision would require the Department of Commerce to treat currency undervaluation as a “prohibited export subsidy,” which would allow the federal government to impose tariffs on subsidized exports from countries that violate the rules. China is the main target. The bill also would require the Department of the Treasury to crack down on currency manipulation.
Snowe and other proponents say China keeps the yuan’s value artificially low and thus maintains low prices on its imports to the United States. That makes it difficult for U.S. manufacturers and other businesses to compete with Chinese goods, Snowe says.
Snowe spoke on the floor Monday evening in support of the bill, before the 79-19 passage of a procedural motion — including a yes vote from Sen. Susan Collins of Maine — needed to proceed to a final debate and vote.
A final vote on the bill could come Thursday, and passage is expected, though it’s likely that not all 79 senators who voted to proceed will wind up voting yes after various amendments are voted on.
“This day has been far too long in coming for the millions of American workers who are out of work and whose wages have been decimated as a result of our inability to compete with unfairly subsidized Chinese imports,” Snowe said on the floor.
Snowe said undervalued Chinese goods have helped to create a trade deficit with China and cost the U.S. jobs. She cited a report by the Alliance of American Manufacturing that estimates the U.S. trade deficit with China has cost Maine 9,545 jobs since 2001.
Opponents of the bill say it would set off a trade war and do more harm than good. Critics question whether tariffs would create the kind of jobs that proponents say they would, and they say it would result in U.S. consumers paying higher prices for Chinese goods.
In any case, the bill may be a symbolic gesture.
A similar measure overwhelmingly passed in the House in 2010, when Democrats were in the majority. However, the two top House Republicans at the time, John Boehner of Ohio and Eric Cantor of Virginia, were opposed then and don’t want to bring the bill to the floor now, indicating they don’t believe that imposing tariffs is the way to deal with Chinese currency manipulation.
While President Barack Obama has indicated he believes China needs to allow its currency to rise to a fair level, he and his advisors are wary of setting off a trade war.
Michaud is among the House leaders of an effort to gain co-sponsors for the current House version of the currency bill and put pressure on GOP leaders. As of Tuesday, there were 225 co-sponsors, a majority in the House.
Meanwhile, GOP leaders in the House and Democratic leaders in the Senate are preparing to try to pass the long-stalled trade agreements with South Korea, Colombia and Panama that Obama has sent to Congress. Obama and other proponents of the trade deals say they would increase U.S. exports and help create American jobs.
Michaud and other critics of the pacts contend the deals would cost more American jobs than they produce, and say the White House isn’t doing enough as part of the deals to crack down on unfair foreign subsidies and substandard working conditions abroad.
“It’s bad for the economy. It’s bad for job creation,” Michaud said at the Capitol Hill news conference. “By sending the free trade agreements to Congress, … the president is sending mixed messages. Does he want to create jobs here at home or does he want to create jobs overseas?”
Votes on the trade deals could come next week.
Snowe has opposed the deals with South Korea and Colombia but indicated support for the pact with Panama. Collins also intends to support the Panama deal but is still reviewing the South Korea and Colombia agreements, Collins’ spokesman said.
Rep. Chellie Pingree, D-1st District, supports the China currency bill and opposes all three trade deals, her spokesman said.
Jonathan Riskind — 791-6280