A coalition of manufacturing, labor and agricultural interests has spurred a bi-partisan group of 87 members of Congress to write and deliver a letter to the White House that urges President Bush to address “China’s unfair and discriminatory undervalued currency.”
The Fair Currency Alliance released the text of the letter and called on President Bush to make the issue a priority. “By the deliberate undervaluation of its currency, China skews the prices for its goods in the global marketplace, especially disadvantaging U.S. producers,” says Skip Hartquist, counsel to the Fair Currency Alliance (FCA).
“FCA is grateful that so many representatives acted quickly in alerting the President of their strong concerns and the urgency of the situation. We are particularly grateful to Congressman Mike Rogers (R-Mich.) for his leadership in championing this issue within Congress and with the administration.
The letter expresses disappointment that the administration, while it has criticized China’s policy of under valuing its currency against the dollar, has not supported the filing of an unfair trade petition prepared on behalf of the FCA. “We are concerned that your administration’s position on this draft petition signaled to China that resolution of this issue is not an immediate priority of this nation,” the letter states. The FCA is pleased that the bipartisan group is urging the President “to continue to press China for meaningful and expeditious currency reform.
The FCA and its member companies and unions contend that, because the exchange rate “does not reflect market conditions,” prices of American exports to China are unnaturally high, while prices of Chinese exports to the U.S. are unnaturally low.
“This manipulation of the yuan/U.S. dollar exchange rate is a principal cause of the extremely large and ever-growing trade deficit of the U.S. with China. Globally, FCA believes that China’s failure to adjust exchange rates in an orderly manner could result in another Asian monetary crisis with severe implications for workers, manufacturers and service providers worldwide.”
Also in August, Japan’s Ministry of Finance called on China to change its “tightly managed” exchange rate system, which it says, “effectively pegs the yuan at 8.28 to the dollar” no matter how the Chinese economy performs.
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