[CTC] FPIF/Walden Bello: China Lassoes its Neighbors

Tue Mar 16 12:52:07 PDT 2010

Two U.S. congressmen, Timothy Ryan and Mike Michaud, sent a letter Monday
that was signed by a 130 of their colleagues to Treasury Secretary Tim
Geithner and Commerce Secretary Gary Locke urging them to immediately
address the growing problems associated with China's continued currency
manipulation. 

Related News Links:

http://www.michaud.house.gov/index.php?option=com_content&task=view&id=969&I
temid=76

http://wallstreetpit.com/19954-china-manipulates-its-currency-say-130-congre
ssmen

http://business.rediff.com/report/2010/mar/16/label-china-as-currency-manipu
lator-us-lawmakers.htm

The following is the full text of the letter: 

March 15, 2010

Dear Secretary Geithner and Secretary Locke:

We write to express our serious concerns about China's continued
manipulation of its currency. By pegging the renminbi (RMB) to the U.S.
dollar at a fixed exchange rate, China unfairly subsidizes its exports and
disadvantages foreign imports. As we work to promote a robust U.S. economic
recovery, it is imperative that we address this paramount trade issue with
all available resources. We urge your agencies to respond to China's
currency manipulation with the actions outlined in this letter. Doing so
will allow American companies and workers to compete fairly against their
Chinese counterparts and will boost U.S. economic recovery and growth. 

The impact of China's currency manipulation on the U.S. economy cannot be
overstated. Maintaining its currency at a devalued exchange rate provides a
subsidy to Chinese companies and unfairly disadvantages foreign competitors.
U.S. exports to the country cannot compete with the low-priced Chinese
equivalents, and domestic American producers are similarly disadvantaged in
the face of subsidized Chinese imports. The devaluation of the RMB also
exacerbates the already severe U.S-China trade deficit. Statistics show that
between January 2000 and May 2009, China's share of the U.S. trade deficit
for non-oil goods grew from 26% to 83% -- an untenable pattern for American
manufacturers. And finally, China's exchange-rate misalignment threatens the
stability of the global financial system by contributing to rampant Chinese
inflation and accumulation of foreign reserves. For these compelling
reasons, we ask your agencies to pursue the course of action below. 

First, we urge the Department of Commerce to apply the U.S. countervailing
duty law in defense of American companies who have suffered as a result of
the currency manipulation. The U.S. is permitted to respond to subsidized
imports where the elements of a subsidy are met under the countervailing
duty law. The countervailing duty law outlines a three-part test to identify
the presence of a countervailable subsidy: 1) that it involves a financial
contribution from the government; 2) that it confers a benefit; and 3) that
is specific to an industry or a group of industries. China's exchange rate
misalignment meets all three parts of this test and therefore merits the
WTO-permitted application of countervailing duties. 

Second, we ask the Department of Treasury to include China in its bi-annual
agency report on currency manipulation. Since 1994 Treasury has not
identified China as a country that manipulates its currency under the terms
of the Omnibus Trade and Competitiveness Act of 1988 ("Trade Act of 1988"),
but Secretary's Geithner testimony to the Senate acknowledging that fact
surely justifies the inclusion of China in the report. After labeling the
country as a currency manipulator, Treasury should enter into negotiations
with China regarding its foreign exchange regime. These combined actions
will signal the government's willingness to take decisive action against
China's currency manipulation, including the potential filing of a formal
complaint with the World Trade Organization. 

The recommendations identified above must be done in concert with intense
diplomatic efforts, not only with China but also with the IMF and
multi-laterally with other countries. Through a combined strategy of legal
action and international pressure, it is possible China will revisit its
undervaluation of the RMB. If these efforts are not successful, we ask the
Administration to consider all the tools at its disposal, including the
application of a tariff on Chinese imports, to respond to China's currency
manipulation. The economic impact of the RMB undervaluation on American
businesses and workers is too great for the Administration not to pursue a
comprehensive effort. 

This economic downturn has underscored the pressing need to promote policies
that protect U.S. jobs and U.S. businesses. Addressing China's manipulation
of its currency must be a critical part of our strategy to rebuild our
economy and establish safeguards against future financial crises. The
Administration has the legal ability and resources to protect American
businesses in the face of China's RMB devaluation, and we urge you to
exercise this authority expeditiously. 

Thank you for your consideration of this letter. We look forward to your
response. 

Aderholt (R-AL)

Altmire (D-PA)

Arcuri (D-NY)

Baca (D-CA)

Baldwin (D-WI)

Barrett (R-SC)

Berry (D-AR)

R. Bishop (R-UT)

S. Bishop (D-GA)

T. Bishop (D-NY)

Boccieri (D-OH)

Bonner (R-AL)

Boswell (D-IA)

Boucher (D-VA)

Braley (D-IA)

H. Brown (R-SC)

D. Burton (R-IN)

Butterfield (D-NC)

Buyer (R-IN)

Carney (D-PA)

Childers (D-MS)

Coble (R-NC)

Conyers (D-MI)

Costello (D-IL)

Dahlkemper (D-PA)

L. Davis (D-TN)

DeFazio (D-OR)

DeLauro (D-CT)

Dingell (D-MI)

Doggett (D-TX)

Donnelly (D-IN)

Doyle (D-PA)

Ehlers (R-MI)

Ellison (D-MN)

Filner (D-CA)

Foster (D-IL)

Gerlach (R-PA)

G. Green (D-TX)

Grijalva (D-AZ)

Halvorson (D-IL)

Hare (D-IL)

Heinrich (D-NM)

Herseth Sandlin (D-SD)

Higgins (D-NY)

Hinchey (D-NY)

Hodes (D-NH)

Hoekstra (R-MI)

Holden (D-PA)

Holt (D-NJ)

D. Hunter (R-CA)

Inglis (R-SC)

J. Jackson (D-IL)

E.B. Johnson (D-TX)

H. Johnson (D-GA)

T. Johnson (R-IL)

W. Jones (R-NC)

Kagen (D-WI)

Kanjorski (D-PA)

Kaptur (D-OH)

Kildee (D-MI)

Kilroy (D-OH)

Kissell (D-NC)

Kucinich (D-OH)

LaTourette (R-OH)

B. Lee (D-CA)

C. Lee (R-NY)

Lipinski (D-IL)

Loebsack (D-IA)

Lynch (D-MA)

Mack (R-FL)

Maffei (D-NY)

Manzullo (R-IL)

McCotter (R-MI)

McGovern (D-MA)

McHenry (R-NC)

McIntyre (D-NC)

Michaud (D-ME)

B. Miller (D-NC)

C. Miller (R-MI)

Mollohan (D-WV)

C. Murphy (D-CT)

P. Murphy (D-PA)

T. Murphy (R-PA)

Myrick (R-NC)

Napolitano (D-CA)

Olver (D-MA)

Pascrell (D-NJ)

Perriello (D-VA)

Peters (D-MI)

Petri (R-WI)

Pingree (D-ME)

Pitts (R-PA)

Platts (R-PA)

Rahall (D-WV)

Richardson (D-CA)

H. Rogers (R-KY)

M.D. Rogers (R-AL)

M.J. Rogers (R-MI)

Rohrabacher (R-CA)

Rush (D-IL)

T. Ryan (D-OH)

Linda Sanchez (D-CA)

Schakowsky (D-IL)

Schauer (D-MI)

Sensenbrenner (R-WI)

Shea-Porter (D-NH)

Sherman (D-CA)

Shimkus (R-IL)

Shuler (D-NC)

Shuster (R-PA)

Slaughter (D-NY)

Souder (R-IN)

Space (D-OH)

Spratt (D-SC)

Stark (D-CA)

Stupak (D-MI)

Sutton (D-OH)

Taylor (D-MS)

B. Thompson (D-MS)

G. Thompson (R-PA)

Tonko (D-NY)

M. Turner (R-OH)

Upton (R-MI)

Visclosky (D-IN)

Walz (D-MN)

Welch (D-VT)

Westmoreland (R-GA)

C. Wilson (D-OH)

J. Wilson (R-SC)

Woolsey (D-CA)

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