The need to crack down on Chinese currency manipulation even more urgent ahead of upcoming debate on trade agreements that could further disadvantage PA workers and companies
PITTSBURGH, PA — U.S. Senator Bob Casey (D-PA), Chairman of the Joint Economic Committee, toured JATCO Machine & Tool Company today to highlight how unfair trade practices like Chinese currency manipulation have hurt local workers and companies. Senator Casey discussed the letter he sent today to the Democratic and Republican leadership in the Senate calling for a vote to be scheduled on legislation to crack down on Chinese currency manipulation and to force the Obama Administration to act.
“American manufacturers already operate at a tremendous disadvantage due to China’s undervalued currency,” wrote Senator Casey. “Therefore, it is imperative that we crack down on Chinese currency manipulation before consideration of any of the free trade agreements.”
According to a report by the Economic Policy Institute, undervaluation of the yuan provides a 40 percent subsidy to China’s exports, while operating as a 40 percent tax on U.S. imports.
This year, President Obama is expected to send to Congress three trade agreements dealing with Columbia, Panama and South Korea. Ahead of the congressional debate on these trade agreements, Senator Casey also highlighted the negative impact these agreements could have on Pennsylvania jobs and workers: “I have serious concerns about the impact of these agreements, particularly the United States-Korea FTA, on Pennsylvania jobs. The United States-Korea FTA as drafted further intensifies unfair access to our markets, particularly by the Chinese.”
Senator Casey has been a vocal opponent of Chinese currency manipulation. He has repeatedly called on the Obama Administration to more aggressively confront China and he is pushing legislation that would make it harder for the Administration to avoid taking action against China.
The Currency Exchange Rate Oversight Reform Act, which Senator Casey unveiled with Senators Charles Schumer (D-NY) and Debbie Stabenow (D-MI), would vigorously address currency misalignments that unfairly and negatively impact U.S. trade. If passed, the legislation would provide less flexibility to the Treasury Department when it comes to citing countries for currency manipulation. It would also impose stiff new penalties on designated countries, including duties on the countries' exports and a ban on any companies from those countries receiving U.S. government contracts.
Senator Casey’s letter to Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY) is below:
Dear Senators Reid and McConnell:
I write to encourage quick action on legislation to crack down on currency manipulation.
Timely consideration by the Senate is essential. On April 6th, President Obama announced that a deal has been reached with the Columbian government, which will allow Columbia Free Trade Agreement (FTA) to come before Congress for consideration. This news follows a similar announcement late last year concerning the United States-Korea FTA. Given these developments, I expect these agreements, as well as the Panama FTA, to be sent in the coming weeks.
I have serious concerns about the impact of these agreements, particularly the United States-Korea FTA, on Pennsylvania jobs. The United States-Korea FTA as drafted further intensifies unfair access to our markets, particularly by the Chinese. The 35 percent domestic content standard will allow products made mostly with content produced in other nations to flow freely into our markets. In other words, South Korea will be a back door for Chinese goods.
American manufacturers already operate at a tremendous disadvantage due to China’s undervalued currency. According to a report by the Economic Policy Institute, undervaluation of the yuan provides a 40 percent subsidy to China’s exports, while operating as a 40 percent tax on U.S. imports. Our pending trade agenda stands to only make matters worse.
Therefore, it is imperative that we crack down on Chinese currency manipulation before consideration of any of the free trade agreements. I expect Senator Schumer to reintroduce his currency legislation in the coming weeks. I ask you to bring it to the floor for immediate consideration.
Sincerely,
Robert P. Casey, Jr.
United States Senator
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