Interwire 2005AWPA Members Hear About ChinaAttendees at the AWPA breakfast meeting at INTERWIRE 2005 in Atlanta heard a senior official of the National Association of Manufacturers (NAM) outline the association's goals for responding to the challenges raised by China in the international marketplace. Stephen Gold, NAM Vice President, noted that China has become the world's third largest trading economy, and it is on the verge of overtaking Germany to become runner-up to the United States in this category. At the same time, the US has its largest trade imbalance with China, and this bilateral deficit with China has increased from $83 billion in 2001 to $162 billion in 2004. To deal with this growing imbalance - which Gold described as "unsustainable" - the NAM has adopted a six-point program to restore balance and fairness in US-China trade relations. First and foremost, China must revalue its currency by 40%. Through a deliberate policy of manipulation, China has pegged its currency to a fixed rate of 8.28 yuan to the dollar in order to stimulate its economy and boost exports. Gold pointed out that the Treasury Department would soon be releasing its semiannual report to Congress on international exchange rate policies and that NAM was hopeful that this issue would be forcefully addressed. (NOTE: Since the breakfast, the semi-annual Treasury Report to Congress was released, and it contained the toughest language yet on China's undervalued currency peg to the dollar. In releasing the report, Treasury Secretary John Snow said that it was time for China's 12-year peg to the dollar to end. He called on China to make an immediate and significant intermediate step as they move eventually to a market-determined currency. He concluded that if current trends continue without substantial alteration, China's policies will likely meet the technical requirements of the statute for designation. NAM expressed disappointment that Treasury did not designate China for currency manipulation and immediately begin negotiations, but said it was pleased at the tough language and the firmness with which the Treasury indicated it would act if China did not soon end its extreme undervaluation.) Second, the NAM wants the Bush Administration to press China to eliminate counterfeiting of products - from movies and software to auto parts and pharmaceuticals. Third, the United States must retain non-market economy (NME) status for China in the enforcement of our antidumping laws. Fourth, China must eliminate artificial barriers against imports through the guise of administrative directives, regulatory policies, and technical standards. Fifth, US exports to China must be increased by 300% during the next three years. This can be accomplished through the expansion of the US Government's export promotion and financing programs, reductions in China's high industrial tariffs, and further steps to open the Chinese market to imports. Finally, the NAM urges the Administration to promote fair competition by applying US countervailing duty laws and safeguard measures against Chinese subsidies. For more information about Gold's presentation and the NAM's goals concerning China, the US economy and world trade, please visit www.awpa.org/private/meetings/.
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