One of the most widespread political predictions being made in Washington these days is that the new Democratic-controlled Congress will press for big changes in U.S. trade policy.  One of the clearest possible tests of the Democrats’ determination to make big fixes – and provide badly needed relief for American producers and their workers – would be the prompt passage of the currency manipulation bill proposed in 2005 by Ohio Democratic Representative Tim Ryan and former House Armed Services Committee Chairman Duncan Hunter, a Republican from San Diego now running for president.

The bill’s main provisions would designate China’s (or any other country’s) policy of deeply undervaluing its currency as an illegal subsidy against which American victims can win compensatory tariffs through the U.S. trade law system.

Ryan-Hunter is no cure-all for the damage inflicted on domestic industry by the totality of China’s predatory trade practices.  Beijing has displayed the ability and the willingness to shuffle the forms its protectionism takes to keep its trading partners off balance.  But the bill would significantly narrow one of China’s most significant unfair advantages and would represent a big step forward in America’s willingness to take necessary defensive action.

Just as important, Ryan-Hunter’s swift passage will create powerful momentum for defeating the
president’s request to renew his fast-track trade negotiating authority later this year, and for halting the rest of his outsourcing-centered trade agenda dead in its tracks.  

Ryan-Hunter already boasts major political advantages.  There’s a strong case that it’s legal under the World Trade Organization’s rules – to the extent that WTO legality can be reliably predicted.  And rightly or wrongly, WTO-legality is still an important consideration for legislators.

The measure also attracted more than 170 co-sponsors in the last Congress, and to underscore its bipartisan nature, Ryan and Hunter skillfully maintained a balance between Democratic and Republican supporters.  A Senate version was eventually introduced late last September, without co-sponsors, by Sen. Jim Bunning (R-KY).  Both bills contain national security provisions, which means that they fall under the purview of the Armed Services committees as well as the traditionally outsourcing-happy House Ways and Means and Senate Finance Committees.  

Further, even many domestic manufacturing groups still hesitant to oppose current trade policies broad-brush are enthusiastic about Ryan-Hunter.  Therefore, any Congressional actors instrumental to the bill’s passage could endear themselves big-time to this constituency.

More important, the main obstacle to Ryan-Hunter was the Congressional Republican leadership – which voters tossed out of power in November.  As a result, the way should be clear for the avowed party of the common man to push the bill through, at least in the House. (Senate rules make matters more complicated in the upper chamber.)

When a session of Congress ends, all un-passed legislation disappears in a procedural sense and needs to start over from scratch in the following session.  But the picture still looks highly promising for Ryan-Hunter.  Of the 170-plus co-sponsors, nearly160 are returning to the House.

This means that of the 233 Democrats comprising the new House’s majority, more than 36 percent have already co-sponsored Ryan-Hunter, as have more than 36 percent of the 202 Republicans who make up the minority.  In all, the bill in theory has already attracted more than 71 percent of the votes needed for a House majority of 218.

The situation in the two House committees of jurisdiction – Ways and Means and Armed Services – is mixed.  Fifty of the 61 members of the new Armed Services Committee are returnees, and 36 are Ryan-Hunter co-sponsors.  Interestingly, Republican supporters on the committee outnumber Democrats, with four out of their five senior-most members on board (including lead co-sponsor Hunter).  On Ways and Means, however, only nine of the current 41 members (all returnees) have co-sponsored Ryan-Hunter. Six are Democrats, including second-ranking Democrat Fortney Pete Stark of California.

Still to hop aboard: slightly more than 105 Democratic returnees and 40 Democratic freshmen, along with about 120 Republican returnees and 13 Republican freshmen.  Yet with such a big head start, reaching a House majority, especially with the new Democratic leadership’s help, should be easily within reach.

Major change on the Republican side should boost Ryan-Hunter’s chances as well. Many in this session's Republican ranks are staunch supporters of current trade policies and will surely continue fighting Ryan-Hunter – like  Minority Leader John Boehner of Ohio and Minority Whip Roy Blunt of Missouri. But not only are the Republicans fewer in number this time around, they also have lost some of their most fervent ideological free trade leaders through resignation and retirement.

Moreover, many of the Democratic returnees who haven’t yet signed onto Ryan-Hunter have solid records of voting for better trade policies.  At least two dozen other House Democrats have voted reliably against the outsourcing trade agenda since fellow Democrat Bill Clinton left the White House, and numerous others were at least ready to oppose the Bush administration when it made CAFTA a high-profile political battle.  Finally, although the numbers are sometimes exaggerated, many of the Democratic freshmen did make better trade policies prominent planks in their platforms.  

The big question mark is the Democratic leadership, none of whom has yet signed onto Ryan-Hunter.  Will the leadership follow the likely will of the majority of the Democratic caucus – and perhaps the majority of the House?  Ways and Means Chairman Charles Rangel (D-NY) will play a key role here – and unlike his acerbic and dictatorial free trade predecessor, Bill Thomas, Rangel is much more likely to approach the issue with an open mind.  Although in the past he has voted for many free trade deals, Rangel voted against the Central America Free Trade Agreement and opposed the last extension of fast track trade negotiating authority. Rangel recently suggested that trade policy is one area where the administration and the new Democratic Congress could work well together, but on whose terms is unclear.

The stakes are pretty high – nothing less than survival of domestic American manufacturing.  If Ryan-Hunter can’t pass a Democratic-controlled House reasonably quickly, the broader campaign to reform trade policy could be seriously undercut.  At the same time, with a big leadership push, new trade policies are entirely achievable in both the House and the Senate.  Are the Democrats ready to seize this historic opportunity, and put Washington on the side of American producers and working families once again? The fate of Ryan-Hunter in the next few months will go far toward answering this central question.

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