Saturday, October 16, 2010

China currency report delayed

WASHINGTON — The Obama administration announced Friday that it will delay a scheduled report on whether China is manipulating its currency to gain trade advantages until after an upcoming meeting of the world's major economies next month.
The Treasury Department said the administration will wait until after President Barack Obama meets with other leaders of the Group of 20 nations in Seoul in early November.

The administration's announcement was certain to disappoint U.S. manufacturing companies, labor unions and lawmakers who contend that China is keeping its currency undervalued to gain trade advantages.

The report surveying currency practices of other nations is by law required to be submitted to Congress on Oct. 15 and April 15. However this administration and others have often missed that deadline.

The administration announced the delay hours after saying it was launching an investigation into Chinese trade practices that could keep American workers from gaining high-paying green jobs.

U.S. Trade Representative Ron Kirk announced that the government would look into the United Steelworkers complaint that Chinese businesses are able to sell wind and solar equipment on the international market at a cheaper price because they receive subsidies from the Chinese government. The union said the subsidies are prohibited by global trade rules.

The timing of the investigation could be intended to show lawmakers that the administration is getting tough with China on trade policy while postponing the more delicate currency issue until after the Nov. 2 midterm elections.

Sen. Charles Schumer, a vocal critic of China's trade practices, welcomed the trade case but said he was disappointed the administration did not issue a report citing China as a currency manipulator.

"An investigation into China's illegal subsidies for clean energy industry is overdue, but it's no substitute for dealing with China's currency manipulation," Schumer, D-N.Y., said in a statement.

The administration could bring a case against China before the World Trade Organization, if it finds the allegations by the Steelworkers to be true. If the WTO found in America's favor, it would clear the way for the United States to impose penalty sanctions on Chinese imports unless the Chinese government halted the practices.

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