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Fair Currency Bill Introduced In Congress

James A. Morrissey, Washington Correspondent

A bipartisan group of House and Senate members has introduced legislation designed to offset the competitive advantage of countries that undervalue their currencies. The legislation, which has 40 co-sponsors, is one of the top priorities of US textile and apparel manufacturers as well as a wide range of other manufacturing industries.

The Currency Reform for Fair Trade Act (CRFTA) would allow injured US manufacturing industries to seek offsetting duties under countervailing duty or anti-dumping laws. Sponsors of the legislation say it will not violate World Trade Organization (WTO) remedies that are available to member countries. They point out that WTO rules treat currency undervaluation as a prohibited, countervailable export subsidy.

The proposed law states that exchange rate misalignment occurs when a foreign government engages in protracted, large-scale intervention in the exchange markets, with the result that its currency is undervalued or overvalued on an inflation-adjusted, trade-weighted basis by at least 5 percent over an 18-month period.

 “China continues to illegally subsidize products by a third of the costs by manipulating their currency to undercut American goods,” said Rep. Tim Murphy, R-Pa., one of the measure’s initial sponsors. “The time has come for Congress to stand up for American workers and not allow China to run roughshod over the American economy. With this legislation we will finally force China to stop cheating and level the playing field for America’s manufacturers.”

The legislation was launched at a Capitol Hill news conference sponsored by the Fair Currency Coalition, which includes the American Manufacturing Trade Action Coalition (AMTAC), the National Council of Textile Organizations, the National Textile Association,  the US Industrial Fabrics Institute (USIFI) and the American Cotton Shippers Association. It also is heavily weighted with labor organizations including the American Federation of Labor/Congress of Industrial Organizations.

Speaking at the news conference,  Rep. Tim Ryan, D-Ohio, said: “This is one of the most broad-based coalitions I’ve ever had the pleasure to work with. Democrats and Republicans, manufacturers and labor, and representatives from all over the country have come together on this common-sense legislation, which only asks countries to live up to the standards they agreed to when they joined the WTO.”

Auggie Tantillo, executive director of AMTAC, said the Obama administration has said it stands for fair trade, and that “there is no better way to prove that they actually mean what they say than to enact the currency reform legislation.”

Noting that the US technical textile community has “borne the brunt of currency exploitation for some time, with a disastrous effect on employment,” Ruth Stephens, executive director of USIFI, strongly endorsed the legislation, saying, “This effort will help our world have ethical and logical currency principles.”

May 19, 2009