AFS supports Fair Currency Alliance.

In late 2003, AFS became a member of the National Association of Manufacturer's Fair Currency Alliance. This Alliance's efforts are focused on reducing the financial losses inflicted on U.S. manufacturers by China's currency being fixed to the U.S. dollar.

As of February, the Fair Currency Alliance, which also has other trade associations and unions representing manufacturing, agriculture and labor as its members, plans to develop a Section 301 Petition to the White House to address the current problem of Chinese currency manipulation. The petition would derive from Section 301 of the 1974 Trade Act, which allows the U.S. to take action when foreign countries violate U.S. rights under trade agreements or engage in practices that are discriminatory, unjustifiable and unreasonable to U.S. trade.

"While China is accumulating massive foreign currency reserves in an effort to keep its currency undervalued, the bilateral trade deficit has ballooned to almost $130 billion," said Patricia Mears, executive director of the Alliance. "The problem is still solvable, but China must reform its currency practices as a significant step in leveling the playing field for American producers and workers."

Since China joined the World Trade Organization in 2001, many American manufacturers have faced financial difficulties due to the Chinese currency value. The Chinese currency, yuan, has been fixed to undervalue the U.S. dollar regardless of economic situations, as much as 40%. Hence, many U.S. industries are losing money for not obtaining as much in return for what they exchanged.

"The Alliance believes that a Section 301 case will provide the [Bush] administration with critical leverage in negotiations with Beijing by helping ensure both the necessary time dimension and the specific focus needed to resolve this issue," Mears said.