CHINA CURRENCY COALITION
FOR IMMEDIATE RELEASE
Contact: Meg Mullery 202.342.8439
China Currency Coalition Sets the Record Straight
(Washington, DC) (September 24, 2004) – A coalition of U.S. organizations today delivered a letter to United States Trade Representative Robert Zoellick that takes issue with the U.S. government’s rejection of a recent unfair trade petition filed by the coalition and the Administration’s reasoning behind the rejection.
The petition, filed by the China Currency Coalition the morning of September 9 and rejected later that day, details why China’s undervaluation of its currency, the yuan, is inconsistent with global trading obligations and constitutes an export subsidy as defined by the World Trade Organization (WTO). The coalition seeks China’s agreement to value its currency fairly but, absent revaluation, that the Administration seek WTO approval to apply countervailing tariffs on imports, the normal WTO remedy.
The USTR’s response included characterizing the petition as “reckless” and suggesting that the coalition is indulging in “economic isolationism.” The coalition noted in today’s letter that “ . . .recommending remedies that are fully consistent with the WTO does not strike us ‘reckless,’ but as responsible and pragmatic” and “ . . . holding China to its WTO commitments and insisting that China not use its undervalued exchange rate as a prohibited export subsidy do not constitute economic isolationism . . .”.
The decision to reject the petition came one day before the monthly release of trade data reflecting that the U.S. bilateral trade deficit with China again increased, but this time, according to the letter “ . . .by an astounding 28 percent.” It notes that U.S. exports have been decreasing since March of this year while imports have increased 29%.
The coalition contends that the adverse effects of China’s undervalued currency on U.S. manufacturing, agriculture, service and employment are profound, pervasive, and protracted. “We are concerned that the Administration’s rejection of the petition will cause China to continue to conclude that the Administration does not view this issue as one of urgency and that there is no pressing need for China to take remedial actions required to bring China’s exchange rate into alignment with economic fundamentals,” the letter states. (Complete text of letter and list of coalition members attached.)
The China Currency Coalition is an alliance of U.S. industrial, service, agricultural, and labor organizations.