 |
|||||
 |
 |
 |
 |
 |
 |
 |
|
Brand Protection/Anti-Counterfeiting Card Check and the Employee Free Choice Act Commercial Vehicle Safety Technology Global Environmental Regulations International Trade Negotiations Research and Development (R&D) Tax Credit Stopping Distance for Heavy Duty Trucks
|
supplier issues China Currency Description: The Government of the People’s Republic of China (PRC) maintains tight control over the exchange rate of its currency, the “renminbi” (RMB), which is also referred to as the yuan. PRC controls have resulted in undervaluation of the yuan, thereby subsidizing exports and artificially inflating the price of imports. The U.S. Government, with the support of American manufacturers, charges that China’s foreign exchange regime is a violation of its World Trade Organization (WTO) and International Monetary Fund (IMF) obligations. Market forces, not government intervention, should set the currencies of all major economies, including the PRC. U.S. Government and industry is looking to China to make the necessary reforms to its banking and financial systems to adopt a floating currency. Status: Currency reforms taken by China in July 2005 have resulted in an approximate 10 percent appreciation of the yuan to the dollar. Several high-level meetings were held between U.S. and Chinese officials on this issue over the course of 2007 and more are expected in 2008. Congress is considering several pieces of legislation intended to offset competitive advantages obtained by China due to its currency regime, including legislation which makes currency manipulation subject to countervailing duties. The Administration and Congress rank currency policy among the most important economic and trade issues with China. Impact on Industry: By some estimates, the yuan is undervalued against the dollar by as much as 40 percent, creating a significant price advantage for Chinese manufacturers in relation to American manufacturers, both in the domestic U.S. and global markets. 2008 Anticipated Action: MEMA will continue to monitor the progress of legislation in the Congress and the Administration’s multilateral engagement with China on this issue. Major reform by China to redress trade distortions caused by its currency policy is unlikely in the near term. MEMA will work in coalition with other industries to lobby Congress and the Administration on the benefits of stable, long-term reform. MEMA Staff Contact: Catherine Boland
|
