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

September 28, 2010