The measure, House Congressional Resolution 285, says that foreign currency manipulations are a clear violation of Section 301 of the Trade Act of 1974 and should be stopped. The resolution calls for corrective action by the Bush administration.
According to the sponsors, who include members from Illinois, Indiana and Michigan, China and other Asian countries gain a 25 to 40 percent advantage over U.S.-manufactured and agricultural products by pegging their currencies at a level 25 to 40 percent below the value of the dollar.
U.S. textile manufacturers claim the practice has result in a flood of Chinese and Vietnamese textile imports and the loss of 2 million jobs in their sector alone over the last three years.
The resolution calls for the president to continue negotiations with the East Asian countries – China, Japan, Taiwan and Korea – while pursuing other actions, including:
1) Enforcement of U.S. laws that provide remedies to counteract currency manipulation; 2) encouraging international harmonization of exchange rates based on market forces; and 3) instructing the US Trade Representative to take action under section 301 should negotiations fail to produce results.
“This resolution is bipartisan and calls for the United States to utilize every tool available to counteract the damage being done to U.S. farmers, manufacturers and their employees,” said Stenholm.
Other congressmen from Cotton Belt states have filed legislative proposals requiring the imposition of tariffs on imported products in an amount equivalent to the advantage gained by manipulated currency values.
Cotton producer leaders from the Southeast, meanwhile, have been visiting congressional delegations from their region to urge them to support Resolution 285 and other legislation on trade and farm policy issues.
Members of the Southern Cotton Grower Association and Southeastern Cotton Ginner Association, led by Scotland Neck, N.C. producer Ronnie Fleming, held discussions with Congressional delegations from Virginia, North and South Carolina, Georgia, Florida and Alabama.
Fleming, president of Southern Cotton Growers, said producers urged House and Senate members to co-sign a letter to the President that urges the Administration to initiate the special safeguard provisions for certain textile and apparel products as provided in the 2001 China World Trade Organization accession agreement.
The letter expresses opposition to the inclusion of any provision in a Central America Free Trade Agreement that would grant preferential access to textile and apparel products containing components produced in any countries other than the United States and the five Central America countries in the case of the CAFTA.
The letter expresses opposition to agreeing to cut tariffs on textile products as part of the WTO agreement until and unless other countries first reduce their tariffs to U.S. levels.
As a result of these efforts and those of the other members of a textile-fiber coalition there are 43 co-signers in the House and 11 in the Senate, with the numbers increasing daily.
The producer delegation also urged continued opposition to any changes in the farm bill during consideration of the 2004 agricultural appropriations bill, which could come to the floor of the Senate as early as this week. e-mail: [email protected]