FOR IMMEDIATE RELEASE
August 12, 2015
Contact: Sara Haimowitz, Development Director
202 688 5145, firstname.lastname@example.org
China’s Recent Currency Devaluation Reveals US Trade Strategy Weakness
Washington -- The Chinese government recently devalued the yuan in an effort to artificially cheapen its exports to the US and other nations.
CPA issued the following statement in response:
“The Senate passed strong a currency manipulation bill on May 14, 2015 called the Trade Facilitation and Trade Enforcement Act of 2015 (S 1269), by an overwhelming vote of 78-20. The bill would allow effectively tailored sanctions against economic harm caused by currency cheating by other governments. The House should vote upon and pass that bill when it returns from August recess.
“The Chinese government’s aggressive intervention in the market shows that we cannot trust President Obama’s assertion that currency manipulation is ‘a problem in the past’. (President Obama speech at Nike, 5/8/15). Foreign government intervention in currency markets is an ongoing threat to US growth and violates free market principles. In this case, Chinese exports that are not price competitive will now be artificially cheaper. US products that are domestically and globally competitive will be artificially more expensive.
“President Obama and Ways and Means Chairman Paul Ryan, during the "Fast Track" debate, argued strenuously against strong currency disciplines in future trade agreements. They rejected the truism that hard-fought trade concessions by other countries can be quickly nullified by currency manipulation.
“US trade policy has reduced, rather than increased, economic growth because of an outdated focus upon tariffs and quotas instead of modern trade cheating tactics. Other countries can make concessions, then negate them by devaluing their currency, increasing border taxes, and increasingly subsidizing state owned or controlled companies that export. The US Trade Representative’s office has failed to address this new mercantilism. The 'high standards' rhetoric of the USTR regarding these agreements is largely empty.
“House leadership needs to hold a vote on S 1269, pass it and send it to President Obama for signature. Congress also needs to make clear that any new trade agreements without effective currency remedies will not be approved."
The Coalition for a Prosperous America is a nonpartisan, nonprofit organization representing the interests of over three million households through our agricultural, manufacturing and labor organization members.