The American Iron and Steel Institute (AISI) and five other North American steel industry trade associations sent a letter to the U.S., Canadian, and Mexican Trade and Finance Ministers urging “strong and coordinated” efforts during the G-20 Summit and beyond to achieve “a large and sustained appreciation” of China’s currency (the RMB).
The letter emphasizes that, without a meaningful change in Chinese currency policy, it will not be possible to eliminate the structural imbalances that contributed to the global economic crisis or to achieve NAFTA goals for economic recovery, job creation, and significantly increasing exports, especially of manufactured goods.
“The Chinese government’s ongoing massive interventions to keep the RMB pegged to the U.S. dollar result in a seriously undervalued exchange rate,” the letter explained. “It has caused the loss of millions of good manufacturing jobs in North American over the past decade, and is now a major impediment to economic recovery and industrial employment in the NAFTA region."
The letter also noted that “the RMB is the most seriously undervalued major currency in the world…giving Chinese manufacturers a 40% artificial competitive advantage."
Other steel trade associations joining AISI in issuing the letter are:
• Canadian Steel Producers Association (CSPA)
• Committee on Pipe and Tube Imports (CPTI)
• Mexican Steel Producers Association (Canacero)
• Specialty Steel Industry of North America (SSINA)
• Steel Manufacturers Association (SMA)
The letter was sent to:
• U.S. Trade Representative Ronald Kirk
• U.S. Treasury Secretary Timothy Geithner
• Canadian International Trade Minister Peter van Loan, P.C., M.P.
• Canadian Minister of Finance Jim Flaherty, P.S., M.P.
• Mexico’s Trade Minister Act. Ernesto Cordero Arroyo
to Daily News