The United States will not be able to have a full-blown recovery until it comes to grips with inequities in the international trading system, according to Leo Gerard, international president of the United Steelworkers (USW).
Gerard, who has been a consistent critic of the federal government’s inaction in this area, made this latest observation shortly after the introduction of the “Currency Exchange Rate Oversight Reform Act of 2010,” which seeks to correct one of the worst failings of the present system: currency undervaluation.
“The continuing and deliberate undervaluation of currency by foreign governments, in particularChina, is one of the most pernicious of unfair trade subsidies,” Gerard declared. “Currency undervaluation has contributed substantially to the loss of millions of American manufacturing jobs in the past few years.”
Most economists estimate thatChinaundervalues its currency by as much as 40 percent. Not only does this distort the international trading system, but it also has exacerbated the trade imbalance between the two countries to $227 billion, 80 percent of which can be traced to currency manipulation. Economists estimate this has cost Americans more than 1 million manufacturing jobs.
Meanwhile, employment in American manufacturing has plummeted at the same time that Chinese imports andU.S.trade deficits have set records.
“The USW is committed to working to support this bipartisan legislation that takes positive concrete action,” Gerard stated. “The working families ofAmericaare counting on Congress to stand up for fair trade and good jobs.”