A powerful US free trade group opposes legislation to punish China over its alleged currency manipulation

Congressman Mr Pete Visclosky took to the House floor to speak out against Chinese currency manipulation and to call for a House vote on the Currency Reform for Fair Trade Act. Similar legislation to H.R. 639 passed the Senate by an overwhelmingly bipartisan vote of 63 to 35 on October 6th 2011.

Mr Pete said that "I rise today to address the issue of Chinese currency manipulation. In Northwest Indiana, the steel industry provides middle class jobs and economic security. It supplies the products with which a strong economy can be built and a powerful national defense maintained. Economically, every job in the domestic steel sector creates approximately seven jobs in related industries."

He added that "China understands the value of steel, and of a strong manufacturing base, and has aggressively acted to support and subsidize its domestic industries. For example, China has acted contrary to international trading standards in order to help their domestic manufacturers by routinely manipulating its currency in order to keep prices low on its finished products. As an effect, China's steel production has more than doubled since 2003, while US production has dropped by nearly 40%. We have also lost a third of our manufacturing jobs as China's manufacturing sector continues to grow, nourished by that country's blatant disregard of international law and the adverse consequences visited on other nations and people, most importantly, those who live and want to work in the United States."

The Currency Reform for Fair Trade Act has 230 cosponsors, more than enough to pass the House. In fact, just over a year ago, drawing on the support of American labor and manufacturing, the House expressed its intent to force China to allow the Yuan to reflect an exchange rate set by the open market. On September 23rd 2010, the House approved the Currency Reform for Fair Trade Act by an overwhelming, bipartisan vote of 348 to 79. Unfortunately, the Senate did not act on this legislation. More than 260 of the Members who voted in favor of that measure remain in the House.

According to a report by the Economic Policy Institute titled Unfair China Trade Costs Local Jobs, thanks to our trade imbalance with China, 2.4 million jobs were lost in the United States between 2001 and 2008, including 4,900 jobs from the First Congressional District of Indiana. The report also examines how Chinese currency manipulation has furthered this trade imbalance and contributed to America's job loss, and how China has aggressively acquired US dollars to further depress the value of its own currency. Specifically, China currently has about USD 2.5 trillion in foreign exchange reserves, of which about 70% are in US dollars.

(Sourced from www.allvoices.com)