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US urged to forgo duties threat
Source: Agencies |
September 15, 2010, Wednesday
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Print Edition
THIRTY-SIX US farm and business groups urged Congress yesterday not to pass legislation threatening China with duties on some of its goods if the Chinese government does not revalue its currency.
"We strongly oppose legislation that would allow use of either the anti-dumping or countervailing duty law to address currency concerns for several years," said the group, which included the US-China Business Council, the American Soybean Association and the American Meat Institute.
The letter was sent to House of Representatives Ways and Means Committee Chairman Sander Levin, whose panel is holding two days of hearings this week for testimony from US industry, trade experts and Treasury Secretary Timothy Geithner on steps the United States should take to pressure China to revalue the yuan.
Representative Tim Ryan, the lead Democratic sponsor of the Currency Reform for Fair Trade Act, is scheduled to testify today on the bill, which has 132 co-sponsors. It would authorize the Commerce Department to apply anti-dumping and countervailing duties against "injurious imports" from countries with undervalued currencies.
The farm and business groups, which also included the Business Roundtable, Financial Services Forum and the International Dairy Foods Association, argued in their letter that the legislation calls on the Commerce Department to do a task fraught with difficulties.
"Estimations of the 'correct' currency value would be inherently subjective, unilateral and potentially politicized since there is no agreed-upon method to determine what a country's exchange rate should be in the absence of a market-based determination," the groups said.
The proposed bill also appears to violate World Trade Organization rules "governing the calculation of anti-dumping duties and the types of subsidies that are subject to countervailing duties," they said.
As a consequence, China could successfully challenge the bill at the WTO and potentially win the right to impose retaliatory duties against US exports, they said.
Farm goods are important to expanding US exports, especially to Asia. The US Agriculture Department forecast in May that China would buy a record US$14 billion in US farm goods in 2010, up 20 percent from the previous forecast, making it the third-largest export market for American farmers behind Canada and Mexico.
"We strongly oppose legislation that would allow use of either the anti-dumping or countervailing duty law to address currency concerns for several years," said the group, which included the US-China Business Council, the American Soybean Association and the American Meat Institute.
The letter was sent to House of Representatives Ways and Means Committee Chairman Sander Levin, whose panel is holding two days of hearings this week for testimony from US industry, trade experts and Treasury Secretary Timothy Geithner on steps the United States should take to pressure China to revalue the yuan.
Representative Tim Ryan, the lead Democratic sponsor of the Currency Reform for Fair Trade Act, is scheduled to testify today on the bill, which has 132 co-sponsors. It would authorize the Commerce Department to apply anti-dumping and countervailing duties against "injurious imports" from countries with undervalued currencies.
The farm and business groups, which also included the Business Roundtable, Financial Services Forum and the International Dairy Foods Association, argued in their letter that the legislation calls on the Commerce Department to do a task fraught with difficulties.
"Estimations of the 'correct' currency value would be inherently subjective, unilateral and potentially politicized since there is no agreed-upon method to determine what a country's exchange rate should be in the absence of a market-based determination," the groups said.
The proposed bill also appears to violate World Trade Organization rules "governing the calculation of anti-dumping duties and the types of subsidies that are subject to countervailing duties," they said.
As a consequence, China could successfully challenge the bill at the WTO and potentially win the right to impose retaliatory duties against US exports, they said.
Farm goods are important to expanding US exports, especially to Asia. The US Agriculture Department forecast in May that China would buy a record US$14 billion in US farm goods in 2010, up 20 percent from the previous forecast, making it the third-largest export market for American farmers behind Canada and Mexico.
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