From: / Will Leahy, Manager, China Policy
To: / Asia Task Force, China AmChams
I) House Hearing on Currency Manipulation
The House held a tripartite hearing earlier today on the topic of “Currency Manipulation and Its Effects on U.S. Businesses and Workers.” The hearing was convened by the Energy and Commerce Subcommittee on Commerce, Trade, and Consumer Protection, the Ways and Means Subcommittee on Trade, and the Financial Services Subcommittee on Domestic and International Monetary Policy.
In his opening remarks, Sander Levin (D-MI), Chairman of the Ways and Means Subcommittee on Trade expressed his hope that the hearing would accelerate consideration of relevant legislation drafted to address the issue of currency manipulation.
During the course of the hearing several Members and witnesses expressed their support for H.R. 782, the “Fair Currency Act of 2007”. Introduced by Tim Ryan (D-OH) and Duncan Hunter (R-CA), the bill would make exchange rate misalignment a countervailable subsidy. The bill currently has 94 co-sponsors.
The following witnesses testified in the first panel:
  • The Honorable Donald L. Evans, Chief Executive Officer, Financial Services Forum
  • M. Brian O’Shaughnessy, President and Chief Executive Officer, Revere Copper Products, Inc., Rome, New York
  • Stephen Roach, PhD., Managing Director and Chief Global Economist, Morgan Stanley, New York, New York
  • C. Fred Bergsten, PhD., Director, Peterson Institute for International Economics
  • Mustafa Mohatarem, Ph.D., Chief Economist, General Motors Corporation, Detroit, Michigan
  • Thea M. Lee, Policy Director, American Federation of Labor and Congress of Industrial Organizations
  • William Hickey, President, Lapham-Hickey Steel Corporation, Chicago, IL
Witnesses aired several different views on how to respond to Chinese and Japanese currency manipulation, with some industry representatives arguing for quick legislative action, while others argued that legislation could potentially threaten global economic growth and harm U.S. consumers.
In addition, witnesses were divided on the WTO consistency of H.R. 782, and its Senate counterpart, S.796, introduced by Senators Jim Bunning (R-KY) and Debbie Stabenow (D-MI).
Full witness statements can be found on the Ways and Means web site.
The second panel was composed of the following Administration representatives:
  • The Honorable Mark Sobel, Deputy Assistant Secretary for International Monetary and Financial Policy, U.S. Department of Treasury
  • The Honorable Stephen Claeys, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, Department of Commerce
  • The Honorable Daniel Brinza, Assistant U.S. Trade Representative for Monitoring and Enforcement, Office of the U.S. Trade Representative
The question and answer period was devoted primarily to growing bi-partisan frustration with the Department of Treasury’s failure to label China or Japan currency manipulators in its semi-annual report.
Several questions were asked regarding the failure of the Treasury Department to release its most recently scheduled report on April 15. In response to these inquiries, DAS Sobel explained that the report will be released following the upcoming second session of the U.S.-China Strategic Economic Dialogue May 23 and 24. He did not disclose what Treasury’s determination will be.
II) House Letter to Hu Jintao Demands Action on Darfur
Congressman Tom Lantos (D-CA), chairman of the House Committee on Foreign Affairs, along with 107 members of the House of Representatives including Majority Leader Steny Hoyer (D-MD), sent a letter to President Hu Jintao today, urging the Chinese government to take immediate action to bring an end to conflict in Darfur.
The letter urges China, as a member of the UN Security Council and as the largest foreign investor in Sudan, to allow free conduct of humanitarian operations in Darfur. The letter also highlights the potential for Chinese intransigence on the issue to taint the 2008 Olympic Games in Beijing.
The text of the letter can be found on the House Committee on Foreign Affairs web site.
Please feel free to contact Will Leahy (202-463-5326; ) with any questions.
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