FOR IMMEDIATE RELEASE

Contact: Barry Eisenberg
(202) 974-5210
Email: beisenberg@plasticsindustry.org

SPI STATEMENT ON TREASURY’S CURRENCY REPORT AND SENATE RESPONSE TO CHINA’S CURRENCY PRACTICES

Bills Would Offer Relief to U.S. Manufacturers Harmed by Unfair Currency Practices

WASHINGTON, D.C. (June 15, 2007) – On June 13, 2007, the Treasury Department issued its Semiannual Report on International Economic and Exchange Rate Policies. Although Treasury concluded that “the Chinese currency is undervalued”, it declined to cite China on the basis that it was “unable to determine that China’s exchange rate policy was carried out for the purpose of preventing effective balance of payments adjustments or to gain an unfair competitive advantage in international trade.” On the same day, Senators Max Baucus (D-MT), Chuck Grassley (R-IA), Charles Schumer (D-NY) and Lindsey Graham (R-SC) introduced the “Currency Exchange Rate Oversight Reform Act of 2007.” The bill is intended to strengthen existing laws to combat distorted exchange-rate policies and to enhance the oversight over currency exchange rates.

SPI President William R. Carteaux issued the following statement:

“The Society of the Plastics Industry (SPI) welcomes the attention that this bill will bring to currency manipulation, a longstanding impediment to U.S. trade. 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 its market.

“The U.S. plastics industry has for too long felt the adverse impact of China’s unfair currency practice. Plastics manufacturing is a technologically-advanced and capital-intensive industry able and willing to compete in the global marketplace. However, SPI members have for years competed on an uneven playing field, where countries like China are providing an unfair advantage to their exporters by maintaining an artificially low level of their currencies. Along with high natural gas and energy prices, this has been an external pressure that has unnecessarily burdened the industry’s competitiveness.

“The bill offered by Senators Baucus, Graham, Grassley and Schumer provides a legislative approach to tackling both the global macroeconomic and trade impact of problematic exchange-rate practices. Although SPI is still in the process of reviewing the details of the proposed legislation, SPI believes that the bill could be significantly strengthened if combined with existing bills before the Senate (S. 796, introduced by Senators Stabenow, Bunning and Bayh) and the House of Representatives (H.R. 782, introduced by Representatives Tim Ryan and Duncan Hunter), which recognize that currency manipulation is a government subsidy.

“On behalf of the plastics industry, I commend Senators Baucus, Graham, Grassley and Schumer for focusing the attention on the problem of exchange rate misalignment. With this bill, they demonstrate a true understanding of how important strong enforcement of U.S. trading rights is to our nation’s global competitiveness. New York and South Carolina are among the largest states for plastics manufacturing in this country and the many SPI members from these states will undoubtedly welcome the leadership of their senators on this critical issue.

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

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Founded in 1937, The Society of the Plastics Industry, Inc., is the trade association representing one of the largest manufacturing industries in the United States. SPI's members represent the entire plastics industry supply chain, including processors, machinery and equipment manufacturers and raw materials suppliers. The U.S. plastics industry employs 1.3 million workers and provides nearly $345 billion in annual shipments.

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