Trade Leaders Urge Administration to Address China Currency in WTO
On January 31, 2012, the Chairmen of the Senate Finance and House Ways and Means Committees called on the Administration to pressure China to stop undervaluing its currency at the upcoming World Trade Organization Working Group on Trade, Debt ,and Finance symposium in March 2012.
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WTO Has Begun Efforts to Understand Impact of Exchange Rate Policies
In a letter to U.S. Trade Representative Kirk and Treasury Secretary Geithner, Baucus (D-MT) and Camp (R-MI) express support for the ongoing efforts at the WTO to understand the impact on trade of exchange rate policies and note that the upcoming symposium in March, hosted under the auspices of the WTO Working Group on Trade, Debt, and Finance, will provide an important venue to deepen and broaden the discussion.
Baucus and Camp state that these steps should form the basis for further discussion by the WTO of existing WTO/GATT rules and how those rules could be used to address distortive currency practices.
Administration Urged to Resist China’s Efforts to Block Currency Discussion
The letter notes that China has actively blocked any discussion of existing WTO/GATT rules in the WTO Working Group on Trade, Debt, and Finance and encourages the Administration to strongly promote discussion of existing WTO/GATT disciplines through the Working Group and in other appropriate forums at the WTO.
Addressing China’s Currency Policy Multilaterally is Best Chance for Solution
The letter concludes by stating that addressing China’s currency policy in a multilateral manner holds the greatest promise for an effective and meaningful solution and that China will not end its currency undervaluation unless the U.S. seizes opportunities like this to insist it does. According to the trade leaders, expanding and intensifying discussions at the WTO can bring significantly more pressure to bear on China.
(See ITT’s Online Archives 11122804 for summary on Treasury’s semiannual exchange report which found China was not a currency manipulator and the RMB remains undervalued.
See ITT’s Online Archives 11101212 for summary of Senate’s passage of China currency bill (S. 1619) on October 11, 2011.)