Washington, DC – Senator Susan Collins (R-ME) expressed that she is encouraged by the Chinese government’s announcement that it will stop artificially pegging the value of the Chinese currency, the yuan, to the U.S. dollar. Senator Collins has repeatedly called on China to end this practice, which violates international trade laws. She has also pressed efforts in the Senate to allow the U.S. to enforce certain trade laws on all its trade partners, including those in traditional non-market economies. Senator Collins this week introduced legislation to revise current trade laws to require that all countries doing business with the U.S. are operating under the same rules that provide for fair competition for American manufacturers.
“China has the capacity to be a key international economic player, yet the country has repeatedly refused to comply with standard international trading rules and practices,” said Senator Collins. “Perhaps one of the most glaring violations has come in the form of currency manipulation – in violation of International Monetary Fund and World Trade Organization rules – which allows Chinese businesses to undervalue the prices of their exports. So, the announcement by China that it will allow stop artificially pegging the value of the yuan to the dollar is a good first step.”
“However unfair subsidies from Beijing still bolster many Chinese companies who are expanding their reach into the global market. These subsidies tip the playing field unfairly in favor of these Chinese companies and make it difficult for American manufacturers to compete,” added Senator Collins.
Senator Collins’ legislation, the United States Trade Rights Enforcement Act, will give the U.S. government the tools to enforce international trade laws on traditional non-market economies like China and monitor Chinese compliance with its trade obligations. The bill also requires the Treasury Department to submit a report to Congress defining currency manipulation, describing actions of foreign countries that would be considered to be currency manipulation, and describes how statutory provisions addressing currency manipulation can be better clarified administratively to provide for improved and more predictable evaluation.
The following is a summary of Senator Collins’ legislation:
• Authorizes the application of the US countervailing duty law to exports from non-market economies such as China.
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• Establishes a system of comprehensive monitoring of Chinese compliance with its trade obligations on: intellectual property rights; market access for US goods, services, and agriculture; and accounting of Chinese subsidies. This provision would require the President to issue a semi-annual report to Congress on whether the Chinese government is meeting its obligations and what the President proposes to do if China fails to comply with its requirements.
• Authorizes an additional $6 million per year for USTR, beyond the President’s request, for the General Council, the Office of Monitoring and Compliance, the Office of China Affairs, and the Office of Japan, Korea, and APEC Affairs.
• Requires Treasury to submit a report to Congress that defines currency manipulation.
• Suspends for three years the availability of bonds for new shippers in antidumping cases and instead requires cash deposits to avoid situations in which shippers default on their obligations.
• Authorizes funding for the International Trade Commission and requires an ITC report on the sensitivity of US trade and jobs to current policies.
Senator Collins was invited to testify about China’s trade practices before the Senate Finance Committee last month.