“Outside” being the WTO, in this case. 

Dave Camp and Max Baucus, Congress’s two top dogs on trade, want the administration to try to make currency misalignment a WTO matter (originally Brazil’s idea). Good luck with that one. Since the WTO works by consensus, China can block this issue on its own. Regarding the renminbi, the consultancy fees for working out just how undervalued is undervalued would put international economists’ kids through college for decades to come.

So what’s going on here? Possibly the creation of a distraction in an attempt to forestall currency legislation on the Hill. Camp doesn’t like it, and although Baucus voted for it last year, he would probably be secretly happy to see it stalled indefinitely, not being a confrontationist firebrand. If Congress decides to pass a bill to fix this awkward example of judicial meddling in the near future, it could provide a vehicle on which China-bashers can attach some more radical legislation.

The conventional wisdom is that when the economy picks up and unemployment comes down, trade and currency disputes generally abate. On the other hand, there is an election coming up, and POTUS gave a pretty clear indication in the State of the Union that he thinks that warming up the old protectionist rhetoric from four years ago might play well in the Midwestern swing states. Don’t hold your breath for a currency deal coming out of Geneva – Capitol Hill is the real battleground for this one.