China: US currency bill violates WTO
Source: Xinhua/Shanghai Daily |
October 1, 2010, Friday
|
Print Edition
Print Edition
CHINA said yesterday that a trade bill passed by US lawmakers targeting the yuan violated World Trade Organization rules, reaffirming its view that protective trade measures would not help solve US domestic problems.
The US House of Representatives on Wednesday passed the Currency Reform for Fair Trade Act to allow the United States to impose trade sanctions against its trade partners for allegedly manipulating their currency.
Chinese officials said the move indicates rising US trade protectionism.
With November's midterm elections approaching, the 348-79 vote sends the measure to the Senate. To become law, the bill must gain Senate approval, then be signed by President Barack Obama.
With mounting domestic political pressure arising from high unemployment and lackluster economic recovery, US lawmakers are increasingly arguing that an undervalued yuan gives Chinese imports an unfair trade advantage at the expense of millions of American jobs.
"The US-proposed anti-subsidy investigation into Chinese imports on the grounds of exchange rate violates WTO rules," Yao Jian, spokesman for China's Ministry of Commerce, said yesterday.
Yao refuted the claim that China had gained a trade advantage by means of an undervalued yuan.
He said the outcome of trade between the two countries was instead dependent on the trade and investment structures. Although China had a trade surplus with the United States, it also had hefty trade deficit with many Asian countries, he said.
Yao said Sino-US trade relations had long been mutually beneficial, noting that China was the US's fastest-growing export destination.
Unilateral restrictions cannot re-balance bilateral trade, Yao said. The US should lift the ban on high-tech exports to China, and expand its export categories, Yao said.
He said China was willing to take measures, together with the US, to help balance bilateral trade relations.
"We hope all parties in the United States can evaluate the facts in an objective and comprehensive way and make the right decision conducive to long-term economic and trade relations between the two countries, which would also be beneficial to the interests of the United States," Yao said.
Huo Jianguo, head of the Commerce Ministry's research institute, said, "Pressuring China on the yuan will not solve US domestic problems. Unilateral restrictions will only intensify trade frictions and make the US economy even worse.
"There is no legal basis to launch countervailing probes on the grounds of an undervalued currency. It is inappropriate and untenable."
The China currency debate has split the US business community. Exporters say they are hurt by underpriced Chinese goods. But companies that operate in or export from China worry they might suffer from US sanctions or Chinese retaliation.
The American Chamber of Commerce in China, which represents 1,200 companies, appealed to the Senate yesterday to kill the currency bill. The group said it was unlikely to produce significant US job growth and might harm American exporters.
"Blaming China won't help the US economy, but this legislation may cost American jobs," said the chamber chairman, John D. Watkins, Jr, in a statement.
"We call on the US Senate to thoroughly review the proposed legislation and we hope it does not move forward in the legislative process."
The US House of Representatives on Wednesday passed the Currency Reform for Fair Trade Act to allow the United States to impose trade sanctions against its trade partners for allegedly manipulating their currency.
Chinese officials said the move indicates rising US trade protectionism.
With November's midterm elections approaching, the 348-79 vote sends the measure to the Senate. To become law, the bill must gain Senate approval, then be signed by President Barack Obama.
With mounting domestic political pressure arising from high unemployment and lackluster economic recovery, US lawmakers are increasingly arguing that an undervalued yuan gives Chinese imports an unfair trade advantage at the expense of millions of American jobs.
"The US-proposed anti-subsidy investigation into Chinese imports on the grounds of exchange rate violates WTO rules," Yao Jian, spokesman for China's Ministry of Commerce, said yesterday.
Yao refuted the claim that China had gained a trade advantage by means of an undervalued yuan.
He said the outcome of trade between the two countries was instead dependent on the trade and investment structures. Although China had a trade surplus with the United States, it also had hefty trade deficit with many Asian countries, he said.
Yao said Sino-US trade relations had long been mutually beneficial, noting that China was the US's fastest-growing export destination.
Unilateral restrictions cannot re-balance bilateral trade, Yao said. The US should lift the ban on high-tech exports to China, and expand its export categories, Yao said.
He said China was willing to take measures, together with the US, to help balance bilateral trade relations.
"We hope all parties in the United States can evaluate the facts in an objective and comprehensive way and make the right decision conducive to long-term economic and trade relations between the two countries, which would also be beneficial to the interests of the United States," Yao said.
Huo Jianguo, head of the Commerce Ministry's research institute, said, "Pressuring China on the yuan will not solve US domestic problems. Unilateral restrictions will only intensify trade frictions and make the US economy even worse.
"There is no legal basis to launch countervailing probes on the grounds of an undervalued currency. It is inappropriate and untenable."
The China currency debate has split the US business community. Exporters say they are hurt by underpriced Chinese goods. But companies that operate in or export from China worry they might suffer from US sanctions or Chinese retaliation.
The American Chamber of Commerce in China, which represents 1,200 companies, appealed to the Senate yesterday to kill the currency bill. The group said it was unlikely to produce significant US job growth and might harm American exporters.
"Blaming China won't help the US economy, but this legislation may cost American jobs," said the chamber chairman, John D. Watkins, Jr, in a statement.
"We call on the US Senate to thoroughly review the proposed legislation and we hope it does not move forward in the legislative process."
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