WASHINGTON Another group representing retailers has joined those opposed to legislation designed to pressure China to revalue its currency.
Following last week’s statement of opposition by the Retail Industry Leaders Association, the National Retail Federation is urging the House to reject H.R. 2378, the Currency Reform for Fair Trade Act, a bill that would require the Department of Commerce to determine whether a country’s currency is undervalued and constitutes an illegal export subsidy when considering cases of countervailing duties. The organization said the bill may violate certain World Trade Organization policies that determine what kinds of government financial contributions can be considered prohibited export subsidies and that it could set off retaliatory measures against U.S. exports by the Chinese.
Many members of Congress lately have stepped up criticism of China’s policy of pegging its currency, the renminbi yuan, to the U.S. dollar, saying that it constitutes currency manipulation that undercuts U.S. manufacturers.
“While we agree that the Chinese currency needs to move toward a market-determined exchange rate, H.R. 2378 would be ineffective in addressing the currency issue and would create significant costs for U.S. companies and workers in retail and other industries,” NRF SVP government relations Steve Pfister said. “This bill cannot provide effective leverage over China to resolve the currency issue or have any positive impact on either the trade deficit or U.S. jobs.”