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House Ways And Means, Senate Banking Committees Hear Currency Reform Testimony

The House Ways and Means Committee last week held hearings to examine China's exchange rate policy. On September 15, the committee heard testimony from Rep. Tim Ryan, D-Ohio, who submitted a petition from the Fair Currency Coalition (FCC) urging "the enactment of effective legislation to counteract currency misalignment without further delay." The petition has been signed by 273 FCC member companies, trade associations and labor organizations -- including a number of textile manufacturers, equipment suppliers and associations.

"Americans want more jobs. Main Street is delivering a clear message to Congress with this petition that fixing currency is an integral part of solving the job problem," said FCC Executive Director Charles Blum. The coalition delivered the petition to Ryan and Rep. Tim Murphy, R-Pa., who are the lead sponsors of H.R. 2378, The Currency Reform for Fair Trade Act of 2009.

Cass Johnson, president of the National Council of Textile Organizations (NCTO), made the following statement with regard to the need to pass currency reform legislation: "It is evident by the $35 billion textile and apparel U.S./China trade deficit that undervaluation of the renminbi (RMB) promotes predatory export practices. Currency manipulation allows countries like China to flood the markets of countries like the United States with artificially cheap imports creating dangerous trade deficits, surging overseas debt, massive job losses, and the continuing erosion of the U.S. manufacturing base and its high wage workforce. After losing 2.4 million manufacturing jobs over the past decade, Congressional approval of H.R. 2378 is long overdue."

U.S. Treasury Secretary Timothy Geithner appeared before Ways and Means as well as the Senate Banking Committee on September 16, providing lengthy testimony concerning the overall U.S.-China economic relationship. Zeroing in on China's currency practices and the relative lack of appreciation in the value of the renminbi vis à vis the dollar and other currencies, he stated, "We are concerned, as are many of China's trading partners, that the pace of appreciation has been too slow and the extent of appreciation too limited. ... China needs to allow significant, sustained appreciation over time to correct this undervaluation and allow the exchange rate to fully reflect market forces."

"We view Secretary Geithner's remarks as an invitation for Congress to pass strong WTO-consistent legislation to address illegally undervalued currencies," said FCC's Blum in response to Geithner's testimony. "The House should act first by passing the bipartisan Ryan-Murphy Currency Reform for Fair Trade Act, H.R. 2378, immediately," he added, noting that the bill "has been very carefully drafted to comply with all U.S. international obligations while exercising our rights under WTO rules."

In the Senate, Sen. Charles Schumer, D-N.Y., Debbie Stabenow, D-Mich., and Lindsey Graham, R. S.C., have introduced a similar bill: S. 3134, The Currency Exchange Rate Oversight Reform Act of 2010.

September 28, 2010