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USA:White House dumps industry petition for Yuan value review |
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2004-9-13
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The Bush administration rejected a call from domestic labour, textile and steel groups to investigate the value of China''s currency that could lead to a confrontation at the World Trade Organisation (WTO).
“Today''s petition is reckless because the remedy it seeks of a 40-per-cent across-the-board tariff would put up walls around America, hurting US exports, destroying US jobs and endangering our economic recovery,” said Richard Mills, a spokesman for the US Trade Representative''s Office.
Rob Nichols, a spokesman for the Treasury Department, added that the Bush administration had roped in the Group of Seven leading industrialised nations and other global forums to put pressure on China.
“As a result of these efforts, the Chinese have agreed that making this transition to a market-based exchange rate is one of their top priorities,” Nichols said.
The administration''s rejection of the petition came just hours after it was submitted on Thursday by the China Currency Coalition, composed of 36 companies, business groups and unions led by the AFL-CIO labour organisation.
The group comprises mainly of steel and textile companies and industries from the USA.
In the group''s petition it was argued that the yuan - pegged at 8.28 yuan (S$1.70) to the US dollar for the past decade - was undervalued by about 40 per cent, which they said acted like an illegal export subsidy.
If the US won a case at the WTO, it would open the door for Washington to slap 40-per-cent tariffs on Chinese goods.
Coalition members blame China''s currency peg for a large chunk of the 2.7 million US manufacturing jobs lost over the past three years and the country''s trade deficit with China, which hit a record US$125 billion (S$213 billion) last year and could surpass US$150 billion this year.
Democrat presidential candidate Senator John Kerry criticised the Bush administration for rejecting the petition.
He accused US President George W. Bush of leading the US ''in the wrong direction'' by failing to enforce trade agreements and protect jobs. |
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