“The state of Pennsylvania has lost over 190,000 manufacturing jobs since 2001, and I have seen first-hand, the devastation this does to local communities,” said Senator Casey. “China is using its cheap currency to subsidize its exports and decimate our domestic manufacturing. Right away, when a Chinese good comes to market, it has a 40% advantage because of currency manipulation, and that is before you factor in the direct subsidies, suppressed wages and total lack of labor and environmental standards.”
Senator Casey’s amendment that passed as part of the Currency Reform and Market Access Act gives the Treasury Department greater ability to allege multiple violations of GATT and WTO rules. The amendment clarifies that the intent of the legislation is to allow Treasury to pursue in trade disputes any relevant article including those related to subsidies and countervailing measures. This will help to ensure that Treasury can bring the strongest case possible to the WTO.
The countervailing duty amendment that Senator Casey supported did not pass. The amendment was based on the Fair Currency Act which Senator Casey is also cosponsoring. Applying countervailing duties provides a trade remedy to currency manipulation by giving those affected better access to relief. These cases tend to move much more quickly than those brought to the WTO or the IMF.
The base bill, the Currency Reform and Financial Markets Access Act (S1677), would strengthen the definition of currency manipulation, require the Treasury Department to submit a detailed plan of action to the Congress within 30 days of a finding by Treasury of manipulation, and provides Treasury the authority to file a WTO case to remedy currency manipulation if the goals and benchmarks are not met within 9 months. It would also promote Treasury’s role in enhancing the competitiveness of U.S. financial services firms.