Lawmakers Introduce Currency Reform Bill

U.S. Senators Debbie Stabenow (D-MI) and Jim Bunning (R-KY), and Congressmen Tim Ryan (D-OH) and Tim Murphy (R-PA) introduced today the Currency Reform for Fair Trade Act of 2009, which would make the unfair trade practice of prolonged currency misalignment actionable under U.S. countervailing duty (CVD) and anti-dumping law. "Prolonged currency misalignment" would occur whenever a foreign country aligns its currency to the U.S. dollar for a prolonged period at an unfairly low market rate. Such behavior is an illegal trade barrier and illegal export subsidy, the bill's sponsors said, because it makes goods from the offending country artificially less expensive, and unfairly competitive.

A bipartisan group of 40 members of Congress -- 23 Democrats and 17 Republicans -- have sponsored the House bill, H.R. 2378. Sherrod Brown (D-OH) and Olympia Snowe (R-ME) have sponsored the Senate version of the bill, for which no bill number is yet available.

The Fair Currency Coalition, an alliance of industry, agriculture, and worker organizations, announced its support. FCC Executive Director Charles H. Blum said, "Export subsidies are prohibited under the WTO rules. When subsidies cause injury, those rules mandate a countervailing remedy. Because the U.S. Commerce Department continues to refuse even to investigate allegations of prolonged currency misalignment, tens of thousands of jobs and even entire industries are being lost. This legislation is a 'must have' if America is to enjoy a sustainable recovery." The FCC estimates that the Chinese currency, the yuan, remains undervalued by about 30 percent because of the Chinese government's continued policy of currency manipulation.

Another supporter, AFL-CIO Secretary-Treasurer and FCC Co-Chair Richard L. Trumka, said, "Job creation is the number one issue on the minds of the AFL-CIO's 10 million members right now. While enacting the stimulus has provided critical short-term relief, the United States will not see sustained employment growth until our government stops China, Japan and others from using their undervalued currencies to steal American jobs."
In a statement, Bill Kerins, president of Wheatland Tube Company and vice chairman of the Committee on Pipe and Tube Imports, said, "Fair and free trade cannot exist when the world's third largest economy manipulates its currency to benefit exporters to the U.S. market."

Contact Alan Field at afield@joc.com.