Snowe Urges President's Top Trade Advisor to Confront Devastating Foreign Currency Manipulation Practices

Press Release

At a Senate Finance Committee hearing today, U.S. Senator Olympia J. Snowe (R-Maine), a senior member of the Committee, implored U.S. Trade Representative Ron Kirk to address currency manipulation practices that have devastated industries in Maine and around the nation. Senator Snowe, who introduced the Currency Reform for Fair Trade Act in February, also pressed the Ambassador about the Administration's unwillingness to investigate apparent currency undervaluation.

"There is a definite correlation between foreign currency manipulation practices and the decimation of jobs nationwide, and the economic toll is indisputable. In fact, one must look no further than the loss of 2 million jobs nationwide and 10,000 in Maine since China joined the World Trade Organization," said Senator Snowe. "For all of our discussion on this critical issue of global competitiveness with various administration officials, these manipulative trade practices endure and have been a clear contributing factor to the withering of our once unparalleled manufacturing base."

Senator Snowe cited the 650 jobs that are on the line at the Millinocket and East Millinocket paper mills, noting that Maine's paper industry has been directly affected by China's unfair trade policies that have undercut their ability to compete in both domestic and international markets. Last year, several U.S. paper manufacturers with mills in Maine brought forward allegations that China was violating our trade rules by illegally subsidizing their product in the U.S. market. In September 2010, Senator Snowe testified before the International Trade Commission and made the case that paper manufacturers in China and Indonesia were illegally selling their products in the U.S. at unfairly subsidized and underpriced rates. While the case was ultimately successful and penalties have now been imposed on some foreign producers, the Obama Administration refused to even initiate an investigation into whether China's currency practices constituted an illegal export subsidy -- as Senator Snowe and workers in Maine have long contended. In response, Senator Snowe introduced legislation in February, the Currency Reform for Fair Trade Act, which would prevent the Department of Commerce from refusing to investigate allegations of currency undervaluation and ensure our government is equipped to respond on behalf of American businesses by imposing countervailing duties on subsidized exports from countries like China. To date, the Obama Administration has not addressed whether it would support this approach.

"Even Federal Reserve Chairman Benjamin Bernanke noted that currency manipulation amounts to an effective subsidy for foreign markets," said Senator Snowe, who asked Ambassador Kirk whether he would support, as a precondition for all trade agreements, a requirement that President Obama certify that there has been no governmental currency intervention or manipulation on the part of the parties involved in the agreement with the United States. Kirk agreed that China's currency practices were a serious problem, but he continued to defer when it came to Senator Snowe's proposals to begin leveling the playing field for workers in Maine and across the U.S.

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