[CTC] AFL-CIO presses for vote to pass China currency bill

[Citizens Trade Campaign]

U.S. Declines to Label China a Currency Manipulator 

By TOM BARKLEY
<http://online.wsj.com/search/term.html?KEYWORDS=TOM+BARKLEY+++++&bylinesear
ch=true> 

JULY 8, 2010, 6:46 P.M. ET

http://online.wsj.com/article/SB10001424052748704111704575355533569310948.ht
ml

 

WASHINGTON -- The U.S. opted against declaring China a currency manipulator
Thursday, with U.S. Treasury Secretary
<http://topics.wsj.com/person/g/timothy-geithner/624> Timothy Geithner
instead shifting the focus forward on the yuan's future appreciation. 

"What matters is how far and how fast the renminbi appreciates," said Mr.
Geithner in a statement, referring to the other name for China's currency. 

He pledged to "closely and regularly monitor" the currency's appreciation
and consult with Congress in ongoing efforts to expand U.S. exports to
China. 

The Treasury's decision once again to decline to declare formally that China
is manipulating its currency is certain to further anger members of
Congress, who happen to be on recess this week. 

Mr. Geithner's decision to skip an April deadline to submit the semi-annual
currency report to Congress raised hackles on both sides of the aisle. 

He has called for patience in pursuing quiet diplomacy to get China to
resume the currency appreciation that it halted in 2008 during the global
crisis, pointing to the decision last month to depeg the yuan from the
dollar as evidence of success. 

The Treasury said in its report that the depegging is a "significant step,"
while noting that the currency remains undervalued. 

Still, many lawmakers remain unconvinced by China's overture. Rep. Sander
Levin (D, Mich.), who chairs the powerful House Ways and Means Committee,
responded to the announcement by calling for the U.S. to consider filing a
complaint with the World Trade Organization if China fails to enact
significant changes in currency policy. He dismissed the yuan's gains so far
as too modest. 

"There is no real question that China's exchange rate policy is unfair,
contributes to global trade imbalances, and costs the United States jobs and
economic growth, particularly in the manufacturing sector," said Mr. Levin
in a statement. 

Since China's announcement on June 19, the yuan has strengthened 0.8%
against the dollar, compared with the 21.2% appreciation during the last
period of depegging from July 2005 through July 2008. But the Treasury
stressed that it will take time before it can assess whether the policy
change will correct the undervaluation. 

A bipartisan group of senators has introduced a bill that would lower the
hurdle for taking action against China, requiring only that an exchange rate
is misaligned instead of having to determine that a country is intentionally
manipulating the currency. It also lays out a series of escalating punitive
actions, including countervailing duties and prohibiting access to U.S.
government contracts. 

If the Treasury finds a country is manipulating its currency under current
law, it must launch bilateral talks or take the issue to the International
Monetary Fund. 

Write to Tom Barkley at  <mailto:tom.barkley at dowjones.com>
tom.barkley at dowjones.com 

 

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