CPA sent the following letter to The Honorable Sander Levin, Chairman, Committee on Ways and Means regarding the currency issue.  We are working to move this issue along.  

CPA sent a letter to each of the sixteen senators pushing for passage of the pending Free Trade Agreements with Korea, Colombia and Panama. Senator Orrin Hatch (R-UT) spearheaded the letter and our response to him follows below.
 

On March 31, 2010, the United Steelworkers and the U.S. Aluminum Extrusions Fair Trade Committee filed a countervailing duty petition with your department covering certain aluminum extrusions from China.  The petition alleges that China's currency undervaluation is a subsidy countervailable under U.S. trade laws.

Secretary Locke must decide tomorrow whether to initiate an investigation.  CPA sent a letter urging him to do so, with particular attention to the currency issue.

What's the significance?  We believe that U.S. trade laws now allow us to treat persistent currency undervaluation as a countervailable subsidy.  But many do not.  Commerce has made unhelpful statements in Federal Register notices that argue against this conclusion.  The currency bills CPA supports, HR 2378 and S 1027 are designed to clarify that currency is a U.S. trade law violation.  Locke's action on the aluminum extrusions case may be instructive.

The letter is below the fold.

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The House Ways & Means Committee held a hearing yesterday (March 24, 2010) on currency manipulation.  Sander Levin (D-MI) presided.  CPA submitted this written testimony. 

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WRITTEN TESTIMONY OF

COALITION FOR A PROSPEROUS AMERICA

BEFORE THE UNITED STATES HOUSE OF REPRESENTATIVES

COMMITTEE ON WAYS AND MEANS

HEARING ON THE EXCHANGE RATE POLICY OF THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA, AND ITS IMPACT ON THE U. S. AND GLOBAL ECONOMIES

HEARING DATE MARCH 24, 2010

Thank you Chairman Levin, and members of the House Committee on Ways and Means, for allowing the Coalition for a Prosperous America to present this written testimony to you.  We respectfully request that this written testimony be accepted into the written record for this hearing.
SUMMARY OF TESTIMONY:

The Coalition for a Prosperous America, and its members, support neutralizing the persistent undervaluation of the Chinese renminbi through countervailing duties and/or anti-dumping duties.  This can best be accomplished through passage of the Currency Reform for Fair Trade Act of 2009 (H.R. 2378).  There is wide agreement that China persistently undervalues its currency and that the impact is a mercantilist one, not a free-trade result.  The quantity of undervaluation is anywhere from 25 to 50 percent, a range that is agreed upon widely.  This currency manipulation has in large part been an underlying cause of the Great Recession. 

The volume of manufacturing and jobs off shored because of this unfair trade tactic has been devastating.  As Treasury Secretary Geithner has argued, we cannot grow GDP without correcting this problem.  Diplomacy and negotiation have been tried for several years, reached the upper levels with President Obama's November 2009 visit to China, and failed.  Enforcement of international norms, which disallow such undervaluation, is necessary.  The U.S. House should pass the Currency Reform for Fair Trade Act for 2009 (HR 2378) to neutralize this currency advantage and return to free and fair trade.  Passage of HR 2378 is the most significant jobs creation and economic growth action that this body can take.