Casey to Geithner: U.S. Must be Firm- Insist on Level Playing Field for Pennsylvania’s Job Creators
WASHINGTON, DC - Today, U.S. Senator Bob Casey (D-PA) called on Treasury Secretary Tim Geithner to use an upcoming trip to China to confront the country over its abuse of international trade laws and specifically its efforts to manipulate its currency, all practices that cost jobs in Pennsylvania.
This week, Secretary Geithner is set to travel to China to meet with Chinese Vice Premier Wang Qishan, which represents a key opportunity to finally press China on its disregard for international trade law.
“For too long, China has ignored international trade law and manipulated its currency all to the detriment of Pennsylvania workers. It’s time for the Administration to step up and confront China,” Senator Casey said. “Secretary Geithner should use his upcoming trip to tell China ‘enough is enough,’ the U.S. will no longer tolerate their cheating.”
China continues to push to become the world’s manufacturer, using currency manipulation, rampant subsidies, theft of intellectual property, and attempts to control raw materials to achieve its goal. This collection of policies makes China the biggest obstacle to fair international trade. U.S. manufacturers, including those in Pennsylvania, are some of the most competitive and advanced in the world. But they should not be expected to compete against the Chinese government. In Pennsylvania for example, Chinese intellectual property theft hurts the makers of Zippo Lighters which must compete against fake products bearing their logo and trademark.
In his letter Casey wrote, “We must continue to put pressure on our trading partners to compete fairly. Treasury’s failure to label China as a currency manipulator is a missed opportunity. I fear that we see the impact of this failure in other nation’s adoption of similar policies. We must be firm. Our manufacturers deserve the opportunity to compete on a level playing field.”
Casey has been a leader in the push to force China to obey international trade law and was an original co-sponsor of a bill passed last year that would punish China for manipulating its currency. Senator Casey has also called on U.S. Customs officials to crackdown on China’s manipulation of the honey market and urged the Administration to clamp down on China’s monopoly of rare earth metals. Most recently, Senator Casey urged the SEC to investigate China’s access to U.S. capital markets—a process which has undermined the domestic solar industry.
The full text of Senator Casey’s letter to Secretary Geithner can be seen below:
The Honorable Timothy F. Geithner
Department of the Treasury
Dear Mr. Secretary:
As you prepare to attend meetings in China and Japan next week, I ask that you keep currency manipulation at the top of your agenda for conversations with leaders from both nations.
On December 27, 2011, the Department of the Treasury Office of International Affairs released its bi-annual report to Congress on International Economic and Exchange Rate Policies. After failing to hold China accountable for its currency practices in past reports, I was pleased to read the following statement, clearly articulating China’s persistent manipulation of its currency: “China’s long-standing pattern of reserve accumulation, the persistence of its current account surplus and the incomplete appreciation of the renminbi, especially given rapid productivity growth in the traded goods sector, indicate that the real exchange rate of the renminbi is persistently misaligned and remains substantially undervalued.” Given the clarity of this statement, you can imagine my confusion with Treasury’s conclusion that China is not a currency manipulator for the purposes of this report.
By Treasury’s own conclusion, China continues to advance policies that undervalue its currency at the expense of American manufacturers. Specifically, China continues to buy dollars to inflate their value and to keep its own currency weak. As Treasury’s report illustrates, at the end of September 2011, China held more than $3.2 trillion in foreign exchange reserves, the large majority of these holdings in US dollars. Furthermore, instead of sticking to its commitments to increase domestic consumption, China continues to increase its global export market share. As I have communicated in the past, the impact of these policies on Pennsylvania is devastating. According to analysis by the Economic Policy Institute, from 2001-2010, our trade deficit with China has led to the loss of 106,970 jobs in Pennsylvania—almost 2 percent of total employment in our state. Across the Nation, this trade deficit has cost 2.8 million jobs in the same timeframe.
Recent actions by the Japanese are another cause for concern, particularly as overtures are made for Japan to join the Trans-Pacific Partnership negotiations. Faced with tremendous, unanticipated economic difficulties, the Japanese government moved twice this year to limit yen appreciation. As of publication of the International Economic and Exchange Rate Policies report, yen reserves were $1.22 trillion—second only to China in size of stock. I would encourage you to address these practices directly with the Japanese next week. As our nations look to revisiting our trade relationship, these practices are counter-productive and damaging to any future progress.
We must continue to put pressure on our trading partners to compete fairly. Treasury’s failure to label China as a currency manipulator is a missed opportunity. I fear that we see the impact of this failure in other nation’s adoption of similar policies. We must be firm. Our manufacturers deserve the opportunity to compete on a level playing field.
I look forward to hearing about your dialogue with each nation.
Sincerely,
Robert P. Casey, Jr.
United States Senator
