End silence on China’s currency manipulation

By U.S. Sen. Olympia Snowe | Mar 19, 2010

Washington, D.C. — I joined with a bipartisan group of 14 U.S. senators March 16 to cosponsor and announce new legislation to vigorously confront China’s currency manipulation, which unfairly and negatively affects U.S. trade.

Indeed, “The Currency Exchange Rate Oversight Reform Act of 2010” represents a significant step forward in our efforts to eliminate the unfair currency practices that for years have given unearned advantages to foreign competitors at the expense of businesses and workers in the United States.

I am hopeful Congress will move swiftly to enact this proposal, which provides tools vital for fighting unemployment and standing up for the American worker. 

Despite recent indications that our economy is beginning to show signs of emerging from the longest and deepest recession since the Great Depression, we continue to face significant challenges — and so far this has been a jobless recovery, which means that for millions of families, it is no recovery at all.

In fact, according to the Maine Department of Labor, more than 30,000 manufacturing jobs have been lost in Maine — where such losses have a devastating impact, particularly on our small towns.

It is no coincidence this withering of our country’s once-unparalleled manufacturing base took place during a period of increases in imports from large, often poorly regulated low-cost foreign producers.

When China joined the World Trade Organization in 2001, it promised to reform or eliminate those practices that gave its enterprises unearned advantages not enjoyed by businesses in free market countries like the United States.

Unfortunately, nearly a decade later, manufacturers and workers in trade-sensitive industries — such as paper production in Maine — continue to express immense concern that China’s currency is significantly undervalued, making Chinese imports artificially cheaper when competing with U.S. goods.

As of last year, China had a $198 billion trade surplus with the rest of the world, and its exports to the United States were outpacing imports by more than four to one. Clearly, the Treasury Department’s failure to classify China’s intervention in the valuation of its currency as “manipulation” has been extraordinarily frustrating to the millions of American workers impacted by these practices.

It is vital that our government take action to press China to allow its currency to appreciate more rapidly, according to market forces.

President Obama recently called on China to introduce “a more market-oriented exchange rate,” and the legislation I introduced March 16 provides real consequences for countries that continue to violate global trade rules by holding down the value of their currency.

Our bill not only provides the government with the mandate to challenge trade-distorting currency practices, it also provides the tools for U.S. industry to ensure that the job is seen through to completion.

From Maine to the Midwest, the silence of our government on China’s currency manipulation has become the silence of our factories. The time has come for our government to challenge trade-distorting currency practices and in doing so begin to level the playing field for American manufacturing workers and businesses.

I am proud to serve as a cosponsor of the Currency Exchange Rate Oversight Reform Act of 2010, and I look forward to working with my colleagues to send this critical legislation to the president’s desk at the earliest possible date.

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