U.S. Trade Interests Target China for Trade Sanctions

The National Association of Manufacturers (NAM) is spearheading an effort to file a trade complaint with the Bush administration to halt China's "illegal currency manipulation." With support from a host of U.S. industrial and agricultural groups, as well as trade unions, NAM hopes to develop a "Section 301" trade action against China for its policy of pegging the value of its currency to the U.S. dollar, which the group says constitutes an unfair trade practice. The complaint must first be filed with the U.S. Trade Representative for investigation. Afterwards, it can be filed with the WTO by the Bush administration, which could prompt the WTO to stage talks on the issue and maybe even result in sanctions. At the same time, Japan, South Korea, and Taiwan were also blamed for similar illegal currency manipulations, although China remains the worst offender. By keeping its currency at "40 percent below its market value," China, in particular, has severely hurt U.S. exports, stated a resolution introduced by several members of the U.S. House of Representatives. The resolution added that the illegal currency manipulation has contributed "significantly" to the loss of 2.7 million American manufacturing jobs since the summer of 2000. Rep. Don Manzullo, R-Ill. and chairman of the House Committee on Small Business, said economists have calculated that illegal currency manipulations give products from Asia a 15%-50% competitive advantage over U.S. manufacturers.
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