Fair Currency Bill Introduced In Congress

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

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