US Senate panel OKs currency bill aimed at China

Updated: 2007-07-27 09:16

The US Senate Finance Committee voted 20-1 on Thursday to give the government new tools to pressure countries to adopt more market-oriented currency policies.

The legislation would allow U.S. companies to seek anti-dumping duties on goods from any country that maintains a "fundamentally misaligned" exchange rate after being formally cited by the United States.

"Today's China's renminbi is the focus of our concerns. Tomorrow another economy's currency may threaten even more devastating effects," Senate Finance Committee Chairman Max Baucus, a Montana Democrat, said.

The bill also would require the Bush administration to take action through the International Monetary Fund and the World Trade Organization against targeted countries that refuse to reform their currency policies.

Another provision would allow the Federal Reserve to intervene in global markets against the misaligned currency if the country has not made appropriate reforms one year after being cited by the United States.

The vote came just a few days before U.S. Treasury Secretary Henry Paulson heads to China to press for faster action on currency reform.

Although Beijing has taken some steps toward a market-based exchange rate, many U.S. manufacturers believe the yuan is still undervalued by 25 to 40 percent.

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