President's Support For Chinese Currency Legislation Sought
James A. Morrissey, Washington Correspondent
As President Barack Obama prepares for his visit to China later this week, with trade, the
environment and world economic issues on the agenda, the Fair Currency Coalition (FCC) and its
supporters in Congress have urged the president to support a currency-manipulation bill pending in
Congress that the coalition feels is the best way to address the US/China trade imbalance.
President Obama, and George W. Bush before him, have been opposed to such legislation, preferring instead to address the trade imbalance through diplomatic means.
Forty-five members of Congress sent a letter to President Obama last week, expressing their "surprise and disappointment" that the administration has declined to name China a currency manipulator and urging the President to "recognize China as illegally manipulating its currency and support the Ryan-Murphy bill to stop that harmful practice." That bill would make currency manipulation actionable under US anti-dumping and countervailing duty laws.
The congressional letter said: "This bill would target exchange rate misalignment between the US dollar, Chinese yuan and other major trading partners' currencies, in order to reduce the unnatural comparative advantages that command economies can use against market economies. We need to establish a firm approach to correcting this unfair practice, and defend American industry and business that have been harmed by unfair disadvantages in manufacturing and export that currency misalignment created."
Commenting on the letter, Rep. Tim Ryan, D-Ohio, who, along with Rep. Tim Murphy, R-Pa., co-authored the bill, said: "We need to start making things again in America. This petty, harmful trade practice has taken good jobs and investment out of our country, and I hope the President stands with us to stop it." Claiming that China "does not play by the rules," Rep. Murphy said China has "systematically manipulated its currency" in order to gain an unfair trade advantage over the United States and other trading nations.
Noting that export subsidies are prohibited by the World Trade Organization, the FCC's executive director, Charles H. Blum, said that since the US Department of Commerce continues to refuse to investigate prolonged currency misalignment, this legislation is a "must have if America is to enjoy a substantial recovery."
The FCC is an alliance of industry, agriculture and labor organizations including cotton merchants and shippers, the American Manufacturing Trade Action Coalition, the National Textile Association, the National Council of Textile Organizations and the US Industrial Fabrics Institute.
November 10, 2009