Statement of David A. Hartquist
Collier Shannon Scott
Representing The China Currency Coalition
September 9, 2004
I am Skip Hartquist of the law firm Collier Shannon Scott, counsel to the China Currency Coalition. I would like to welcome you to this press conference to announce the filing of a Section 301 petition on China’s currency manipulation. With me are members of the China Currency Coalition, a group of industry, service, agricultural and labor organizations. Following my introductory remarks, I will introduce Richard Trumka, Secretary-Treasurer of the AFL-CIO, Bill Hickey of Lapham-Hickey, Senator Lindsey Graham and Congressman Sandy Levin.
The Section 301 petition demonstrates that China’s
undervalued fixed exchange rate mechanism has artificially depressed the
value of its currency,
the yuan, and caused the injury to US manufacturers, service companies, farmers
and workers in violation of China’s WTO and IMF obligations, as well
as their commitments to the United States.
You will remember that last May, before the Fair Currency Alliance even filed a petition, the Bush Administration announced that it would reject such a petition and branded us “economic isolationists.” That was a bum rap then, and we hope the Administration has thought better of it by now.
Why are we filing this case today? For many reasons.
First, the Chinese onslaught continues to surge. Every day, every week, every month, more US jobs are lost to unfair Chinese competition. More US companies file bankruptcy or are forced to move their operations to China.
Chinese trade surplus with the United States continues to grow at a rapid
rate. Last year, the Chinese surplus was about $125 billion. This
year, it is headed toward $160 billion. Unless we act, our deficit with China
will be $200 billion before we know it. China’s official reserves are
$480 billion, an increase of $125 billion in one year!
Third, the diplomatic route has produced no results to date. Last May, the Administration counseled us to be patient, to allow negotiations with the Chinese to play out, to give the Chinese time to act. What has happened? No revaluation of the Chinese currency. The Chinese will talk, meet, consider, express concern -- but not act. And they will not unless the heat is turned up.
Fourth, Chinese leadership is expected to come to the United States this month to meet with US officials, and to participate in upcoming G-7 meetings. This is an opportunity for the US to use the leverage of a Section 301 case in face-to-face meetings with the Chinese.
Fifth, we are heartened by increasing bipartisan Congressional concern about this issue. You have seen this concern expressed in a letter from 87 members of the House of Representatives to the President, in numerous legislative proposals, in Congressional hearings, and in many Congressional statements.
world leaders agree that action must be taken. President Bush; Treasury
Secretary Snow; Commerce Secretary Evans; the President of the European Community,
Romano Prodi; the EC Trade Commissioner, Pascal Lamy; and others.
Seventh, both the Republican and Democrat election platforms agree that nations like China must live up their WTO obligations.
Lastly, for their own good, China must act.
The China Currency Coalition respectfully urges the Bush Administration to initiate this petition and use the leverage it provides to convince the Chinese to revalue their currency upward by about 40%.
We also call upon the Bush Administration to take another important step in helping to redress China’s unfair trade practices. The Department of Commerce should announce its willingness to consider countervailing duty cases against China. At present, the policy of the Administration is not to accept anti-subsidy cases against China, on the grounds that China has a non-market, government-controlled economy. The government of China and the government-owned banks offer vast subsidies to Chinese manufacturers, some of which are government-owned or controlled, and others of which are privately owned. Such subsidies are anti-competitive and put US companies and workers, not to mention private companies globally, at a substantial disadvantage. We urge Commerce Secretary Evans to announce a reversal of this outdated policy.