TRADE CASES HEADLINESTrade Cases
AISI, Other Associations Call for Currency Reform for China
Jun. 10, 2010 The American Iron and Steel Institute (AISI) and five other North American steel industry trade associations have sent a letter to the U.S., Canadian and Mexican Trade and Finance Ministers urging “strong and coordinated” efforts during the G-20 Summit and beyond to achieve “a large and sustained appreciation” of China’s currency (RMB).
The letter emphasizes that, without a meaningful change in Chinese government currency policy, it will not be possible to eliminate the structural imbalances that contributed to the global economic crisis or to achieve the NAFTA governments’ goals for economic recovery, job creation, and significantly increasing exports—especially of manufactured goods.
“The Chinese government’s ongoing massive interventions to keep the RMB pegged to the U.S. dollar result in a seriously undervalued exchange rate,” the letter explained. “It has caused the loss of millions of good manufacturing jobs in North America over the past decade, and is now a major impediment to economic recovery and industrial employment in the NAFTA region.”
The letter also noted that “the RMB is the most seriously undervalued major currency in the world…giving Chinese manufacturers a 40% artificial competitive advantage.”
The other steel trade associations are the Canadian Steel Producers Association (CSPA), the Committee on Pipe and Tube Imports (CPTI), the Mexican Steel Producers Association (Canacero), the Specialty Steel Industry of North America (SSINA), and the Steel Manufacturers Association (SMA).
The letter was sent to U.S. Trade Representative Ronald Kirk; U.S. Treasury Secretary Timothy Geithner; Canadian International Trade Minister Peter van Loan, P.C., M.P.; Canadian Minister of Finance Jim Flaherty, P.S., M.P.; and Mexico’s Trade Minister Act. Ernesto Cordero Arroyo.
AISI serves as the voice of the North American steel industry in the public policy arena and plays a lead role in the development and application of new steels and steelmaking technology. The Institute is comprised of 23 member companies, including integrated and electric furnace steelmakers, and 138 associate and affiliate members who are suppliers to or customers of the steel industry.