[CTC] Background on S.3134 | The Currency Exchange Rate Oversight Act of 2010

[Andrew Gussert]

Even The Chamber of Commerce is Critical of
<http://www.huffingtonpost.com/mike-elk/even-the-chamber-of-comme_b_508676.h
tml>  Chinese Currency Manipulation


By Mike Elk, Campaign for America's Future

Last week, I wrote about the growing bipartisan consensus to confront China
on its illegal currency manipulation. 130 bipartisan lawmakers
<http://www.ourfuture.org/blog-entry/2010031116/bipartisan-solution-creates-
2-million-jobs-and-costs-nothing>  issued a call to action and economists
from left to right
<http://www.huffingtonpost.com/michael-moore/the-great-thing-about-the_b_507
852.html>  have come out saying something needs to be done to address this
issue. Now a new player has entered the chorus of those calling for
something to be done about illegal Chinese Currency Manipulation - the
Chamber of Commerce
<http://www.ft.com/cms/s/0/97b29e4e-351c-11df-9cfb-00144feabdc0.html> . 

The Chamber of Commerce has traditionally advocated for free trade on behalf
of big, multinational companies. In the 1990's, the Chamber lead the fight
to get China into the World Trade Organizations. So, for the Chamber to
abandon China is extraordinary. As the Financial Times
<http://www.ft.com/cms/s/0/97b29e4e-351c-11df-9cfb-00144feabdc0.html>
notes: 

The US business community can no longer resist political pressure for
Washington to take a tougher stand against China on trade issues, according
to a senior figure from the US Chamber of Commerce.

Myron Brilliant, senior vice-president for international affairs, who has
previously helped to protect Beijing from hawkish trade policies, told the
Financial Times: "I don't think the Chinese government can count on the
American business community to be able to push back and block action [on
Capitol Hill]."

While Brilliant did not say the Chamber of Commerce would back legislative
efforts to label China a "currency manipulator" , his lack of support for
China is an indication of which way the political winds are blowing. As the
story notes
<http://www.ft.com/cms/s/0/97b29e4e-351c-11df-9cfb-00144feabdc0.html> : 

Mr Brilliant said corporate
<http://www.ft.com/cms/s/0/66958052-355c-11df-9cfb-00144feabdc0.html>
America's attitude had changed in response to a range of "industrial
policies" pursued by Beijing, including the undervaluation of the renminbi,
which made it harder for US companies to do business and compete with China.
He also cited the tough economic times in the US - particularly the near 10
per cent jobless rate - as making it more difficult to argue against tough
action on China. 

The Chamber backed up this talking point by releasing a survey showing that
<http://www.ft.com/cms/s/0/97b29e4e-351c-11df-9cfb-00144feabdc0.html>  "38
percent of foreign firms questioned by the American Chamber of Commerce say
they feel increasingly unwelcome to participate and compete in the Chinese
market." More startling, 57 percent of
<http://www.ft.com/cms/s/0/97b29e4e-351c-11df-9cfb-00144feabdc0.html>
"foreign firms specializing in high-tech and information technology" said
they felt negatively affected by government policies. 

There is clearly a shift in both corporate America and Washington
establishment thinking on the issue of China. Reports indicate that
President Obama, needing to do something big to protect jobs, is seriously
debating labeling China a "currency manipulator" as the April 15th deadline
for doing so approaches. This is all the more reasons why we should be
pushing President Obama to label China a currency manipulator on April 15th.
Then if China fails to fix the problem, we should push President Obama to
take more aggressive actions like placing tariffs on China as Paul Krugman
and others have suggested. 

2-3 millions jobs
<http://www.ourfuture.org/blog-entry/2010031116/bipartisan-solution-creates-
2-million-jobs-and-costs-nothing>  could be created by fixing China's
exchange rate problem. As economist C. Fred Bergsten
<http://www.ourfuture.org/blog-entry/2010031116/bipartisan-solution-creates-
2-million-jobs-and-costs-nothing>  noted "If there is going to be a serious
jobs program, the exchange rate of the dollar must be at the center of the
debate". 

-- 
Mike Elk
Office: (202) 587-1623
Cell: (412) 613-8423
Twitter - @MikeElk

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