US moves on economic bills

| July 1, 2005 | 0 Comments
US moves on economic bills

The US Senate on Thursday made two decisions that have the potential to affect the world economy in a significant way.

First of all, they decided to put off until October any vote on a bill that would impose trade sanctions on China in the form of a 27.5 percent tariff on Chinese imports if Beijing fails to revalue its currency within six months.

This gives the Bush administration more time to attempt to persuade China to its view on revaluation without seeming too coercive.

Later in the day, the Senate gave their approval to the Central American Trade Agreement (Cafta), a hotly contested trade deal that is opposed by the sugar industry.

Sugar producers are afraid that the pact will mean competition in the form of sugar imports from Central American nations.

Sugar producers have been warned, however, that they will face consequences if they block the deal.

Senator Pat Roberts of Kansas hold told representatives of the sugar industry that they can expect cuts to price supports for their products if Cafta fails.

The Republican-backed trade accord is seen by its supporters as a way of supporting free markets and democratic governments in the region.

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