Michaud Urges Crack Down on Currency Manipulation (9-29-10)

On September 29th, the House of Representatives will hold a vote on H.R. 2378, the Currency Reform for Fair Trade Act. Michaud, a cosponsor and leading proponent of the bill, secured the commitment for a vote last week when he asked House leaders not to adjourn Congress before acting on the bill.

According to a study done by the Economic Policy Institute, between 2001 and 2008 approximately 9,000 jobs have been lost in Maine due to the U.S. trade deficit with China, which is fueled by China's undervalued currency.

"I have been pushing for action on this bipartisan bill for years because of the direct impact it will have on jobs in Maine and throughout the country," said Michaud. "By keeping the value of its currency artificially low, China and other countries makes their exports so cheap that the U.S. simply can't compete. Our workers and businesses here in the U.S. deserve a remedy to this, and that's exactly what this bill will provide."

If the bill the House is considering today is passed into law, it will be easier for the Department of Commerce to initiate investigations into China's currency manipulation for the purposes of determining countervailing duties, which is a specific type of tariff levied against a country's imports that have been found to be unfairly subsidized.

China's currency manipulation is a chief concern of domestic paper companies and their workers. Three paper companies, including Sappi Fine and NewPage that have mills in Maine, with 20 mills and 6,000 workers currently have a petition before the International Trade Commission (ITC) and the U.S. Department of Commerce claiming direct injury due to China's trade practices, including currency manipulation. Due to a strict statutory standard, which the bill the House is considering today would change, Commerce declined to investigate the currency manipulation charge, but they did find in favor of the paper company and worker complaint that China was directly subsidizing their paper companies. A positive outcome for the domestic industry and its workers requires both the Department of Commerce and the ITC to make final, affirmative determinations in their favor. The final decision by the ITC is expected on October 19th.

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