June 21, 2007

Dodd, Shelby Introduce Currency and Market Access Legislation to Level the Playing Field for U.S. Workers and Companies

Washington, D.C. – Responding to inadequate action by the Treasury Department to identify and address currency manipulation by our nation’s largest trading partners, Senators Chris Dodd (D-CT) and Richard Shelby (R-AL), Chairman and Ranking Member of the Senate Banking Committee, today introduced the Currency Reform and Financial Markets Act of 2007 to level the playing field for American workers and businesses. The Senators intend to work with their fellow Banking Committee colleagues to ensure that the legislation is passed through Committee in a timely manner. China’s ongoing intervention to keep the yuan undervalued has contributed to the loss of approximately three million American manufacturing jobs and the record-high U.S. trade deficit. The Dodd-Shelby proposal, among other things, would create tough, new authority for both the Treasury Department and the Congress to act to provide a level playing field for U.S. manufacturers and workers. The legislation would also tighten the definition of currency manipulation to provide for greater clarity and to prevent ambiguity or delay in addressing the problem. No other Congressional legislation encompasses these two elements.
    “Just last week, the Treasury Department admitted that there exists ‘heavy foreign exchange market intervention by China's central bank to manage the currency.’ Yet Treasury still refuses to officially identify China as a currency manipulator, despite this evidence that the Chinese government is continuing to undervalue its exchange rate against the U.S. dollar. By failing to call it as they see it, the Treasury Department is neglecting its responsibility to American workers and businesses. This legislation will put American policy where it belongs – on the side of American workers and businesses.”
Senator Shelby said:
    “The facts clearly show, and I have long believed, that China manipulates its currency thereby giving it an unfair trade advantage. The fact that the Treasury Department relies upon an intent finding demonstrates the clear need for legislation. The Strategic Economic Dialogue with the Chinese is important and must continue. However, it is time for the U.S. to avail itself of every tool available to it under the international trade and finance system -- a system that the Chinese have signed on to and agreed to follow the rules of as price for entry. I believe that this legislation will provide the Treasury Department with the impetus necessary to produce real results, and I look forward to working with Chairman Dodd to expedite it through the committee process.”
Dodd and Shelby wrote to Treasury Secretary Henry Paulson last month, urging him to use both dialogue and action to combat currency manipulation. The Banking Committee has held two hearings on the issue this year – one, with Secretary Paulson, in January and one last month. Senators Dodd and Shelby’s announced their legislation on the eve of the Treasury Department's release of the International Economic and Exchange Rate Policy report, which is issued to the Senate Banking Committee and House Financial Services Committee – the committees of jurisdiction over currency-related matters – on a semi-annual basis.
Click here for a summary of the key provisions of the legislation.