Obama administration willing to work with Congress on China currency issue

The White House has walked a tightrope on the issue, saying China should allow its currency to rise while saying the Senate bill could violate international trade rules.

That continued at Tuesday’s House Ways and Means Committee hearing, during which officials said they are willing to work with lawmakers without lending their full backing to any legislative policy changes.

Lael Brainard, Treasury undersecretary for international affairs, told the committee that the White House supports creating a “level playing field” with China, but wouldn’t specify what provisions in the Senate-passed legislation might overstep trade rules.

“I’m reluctant to discuss [any] particular aspect of legislation,” Brainard said. “The test for us is will we be able to have something effective and consistent with international obligations, and we’re willing to work with members of Congress on that front.”

Brainard stopped short of saying President Obama would veto a China currency bill if it passes both chambers.

She and Demetrios Marantis, an official with the Office of the U.S. Trade Representative, said there are other factors contributing to the U.S. trade deficit with China that would not be affected by currency legislation.

“There is no one cause or solution to trade deficits,” Marantis said.

Brainard said getting China to allow its currency to appreciate will “not erase our trade deficit.”

Some committee members pressed for more action on the issue.

“We need to provide a sense of urgency to this issue,” said ranking member Sandy Levin (D-Mich.), who is leading the charge for consideration of his China currency measure. “There’s a tendency to avoid that, to talk about progress and not emphasize the extent of the problem.

“We are finding excuses for inaction and we can’t just shrug our shoulders,” Levin added in remarks critical of GOP leaders, who have not brought a China currency bill to the House floor for a vote.

“Because currency is not China’s only predatory and trade-distorting policy, that cannot be an excuse for refusal to act on it,” he said. “The House leadership must stop using that excuse.”

Levin said intellectual property rights, indigenous innovation, trade-distorting subsidies and discriminatory product standards also need to be addressed more aggressively.