STATEMENT

Contact: Tracy Cullen
(202) 974-5282
Email: tcullen@plasticsindustry.org

SPI STATEMENT ON THE "UNITED STATES FAIR CURRENCY PRACTICES ACT OF 2006"

WASHINGTON, D.C. (October 3, 2006)—On September 28, 2006, Senator Jim Bunning (R-KY) introduced the "United States Fair Currency Practices Act of 2006" (S. 3992). The bill strengthens existing laws to combat distorted exchange-rate policies. S. 3992 accomplishes this goal by directing the Treasury Department to identify and take action against those trading partners whose currencies are "fundamentally misaligned" with general macroeconomic conditions. The bill also gives U.S. manufacturers injured by such unfair currency practices access to relief under U.S. trade laws, either as a prohibited export subsidy under U.S. subsidies law, or in the case of China, as a factor in determining whether Chinese imports are causing or threaten to cause market disruption in the United States. Senator Bunning's bill is a companion to the "China Currency Act of 2005" (H.R. 1498), introduced by Representatives Duncan Hunter (R-CA) and Tim Ryan (D-OH). With 178 co-sponsors, H.R. 1498 enjoys broad bipartisan support.

SPI President William R. Carteaux issued the following statement:

"The Society of the Plastics Industry (SPI) applauds Senator Bunning's leadership on this longstanding irritant in U.S. trade relations. For too long, our trading partners have been allowed to maintain unfair currency practices to the detriment of U.S. manufacturers. While China stands out as the trading partner whose exchange-rate practices are causing the most harm to U.S. interests, China is not alone in the use of such policies to sustain strong export growth and stem U.S. imports into their markets.

"Senator Bunning has offered a legislative approach that tackles both the global macroeconomic and trade impact of problematic exchange-rate practices. Treasury has the means to objectively determine when a country's exchange-rate practice warrants a heightened level of scrutiny, and U.S. manufacturers have remedies from any damage such practices cause in the U.S. market. Senator Bunning's bill strikes a reasonable balance between addressing the global macroeconomic impacts of currency misalignments and giving concrete relief to injured U.S. producers in a WTO-consistent manner.

"The U.S. plastics industry has for too long felt the adverse impact of China's unfair currency practice. Along with high natural gas and energy prices, this has been an external pressure that has unnecessarily burdened the industry's competitiveness. Congress can't fix all of the industry's problems, but our lawmakers can certainly enact laws to help sustain U.S. manufacturing competitiveness.

"On behalf of the industry, I commend Senator Bunning for his steadfast commitment to U.S. manufacturers. He voted in favor of legislation that will help boost natural gas supplies by opening up the Outer Continental Shell to drilling. With this currency bill, Senator Bunning also shows a true understanding of how important strong enforcement of U.S. trading rights is to our nation's global competitiveness. We need true champions of manufacturing, like the Senator, in Washington.

Passage of a law to remedy injurious exchange-rate practices remains a key priority for SPI, and we will continue to partner with our industry allies in the China Currency Coalition to achieve this goal."

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