Taiwan has become the latest target of Washington's concerns over the value of the Chinese yuan, with a group of congressmen introducing a resolution condemning Taiwan for allegedly manipulating its currency at the expense of Amercian jobs.
Taiwan was listed along with China, Japan and South Korea in the little-noticed bill, which was introduced last week by Illinois Republican Don Manzullo, the chairman of the House Small Business Committee, and four other congressmen.
The bill, a non-binding resolution, charges that the currency manipulation by the four countries "has contributed significantly to the loss of United States manufacturing jobs since July 2000," in which time the US manufacturing sector has lost 2.7 million jobs.
It also says that the four countries' currency reserves total more than US$1.2 trillion, "half of which have been bought since 1999."
While much of the thrust of the House measure is aimed at China, the sponsors made it clear in the recommendations contained in the bill that the legislation was aimed at all four Asian currencies.
The bill calls on the US President George W. Bush to "enforce United States laws that provide remedies to counteract the unfair foreign practice of currency manipulation," and to take steps to encourage an international system of floating exchange rates that would "enable the dollar and other major currencies to move toward their equilibrium rates."
The measure also calls on the US Trade Representative's office to take action under Section 301 of the Trade Law of 1974 to combat unfair currency manipulation.
The head of Taiwan's Central Bank of China said on Thursday that Taiwan isn't contributing to the growth of the current-account deficit of the world's biggest economy.
According to historical Taiwan-US trade statistics, "The data clearly shows Taiwan's trade surplus with the US is declining and not increasing. In other words, Taiwan isn't one of the main countries causing the US current-account deficit,'' the Bloomberg reported, quoting Perng Fai-nan (
Taiwan's trade surplus with the US dropped in each of the past three years, according to figures from the Ministry of Finance. It fell 8 percent to US$8.67 billion last year from a year earlier, declined 2.7 percent in 2001 and slumped 14 percent in 2000. Still, the surplus has climbed 10.2 percent to US$6.15 billion in the first eight months of this year from the same period a year ago.
The US current-account deficit widened to a record US$138.7 billion, or a highest-ever 5.1 percent of GDP, in the first quarter, figures from the Commerce Department showed this month.
But pressure for the trade representative to initiate an investigation under Section 301 intensified Thursday, when seven representatives and senators testified before a hearing, blaming China's allegedly undervalued yuan for sapping jobs from America, and hitting at Beijing for a long list of areas in which China has not complied with the obligations it undertook when it entered the WTO in late 2001.
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