Senators push antidumping policy; several Senate leaders introduced currency legislation aimed at countries with suspect export practices.

Four leading Democratic and Republican senators proposed legislation in June aimed at penalizing China over its export practices. The bill, Currency Exchange Rate Oversight Reform Act of 2007, does not include stringent measures such as unilateral tariffs, though it still goes further than legislation the Bush Administration supports.

Under the Senate bill, the new antidumping penalties would apply not only to China but to any other country the U.S. Treasury Dept. decides has a "fundamentally misaligned" currency that requires priority action.

Lawmakers accuse China of holding down the value of the yuan to spur exports, contributing to a U.S. trade deficit with the country that is forecast to widen to a record $300 billion in 2007.

The Senate Finance Committee approach of using antidumping duties to offset a currency-related export advantage is based on the theory that "currency manipulation basically masks dumping," according to a staffer involved in drafting the bill.

Critics of the new bipartisan Senate bill say that it might violate World Trade Organization rules governing the use of antidumping laws. Furthermore, the administration indicated it would oppose the bill.

All four senators, Max Baucus (D-Mont.), Charles Grassley (R-Iowa), Charles Schumer (D-N.Y.), and Lindsey Graham (R-S.C.) introduced currency-related legislation last year and agreed to work together on a consensus bill for the 110th Congress, which they say will protect U.S. interests.

The text of the Currency Exchange Rate Oversight Reform Act of 2007 has been posted on the Senate Finance Committee Web site at www.finance. senate.gov/sitepages/leg/LEG%202007/ Leg%20110%20061307.pdf.