Fighting the currency battle: new legislation offers relief to U.S. manufacturers, including metalcasters, harmed by unfair currency practices.

Two new trade bills in the House and Senate address unfair currency practices. In the House, Reps. Tim Ryan (D-Ohio) and Duncan Hunter (R-Calif.) have introduced the Fair Currency Act of 2007 with more than 50 co-sponsors. The measure modifies the Chinese Currency Act (H.R. 1498). A Senate companion bill has been introduced by Sens. Debbie Stabenow (D-Mich.), Jim Bunning (R-Ky.), Evan Bayh (D-Ind.), Carl Levin (D-Mich.), and Bob Casey (D-Pa.).

The Fair Currency Act gives the administration new tools to address currency manipulation and would clarify that such manipulation is an illegal subsidy under World Trade Organization rules.

Specifically, the legislation:

* defines currency misalignment as a prohibited export subsidy, allowing for application of countervailing duties on imports benefiting from currency misalignment;

* holds China accountable for unfair misalignment practices by clarifying Chinese exchange-rate misalignment as a condition to be considered by the U.S. Secretary of Treasury;

* protects our national security and defense industrial base by prohibiting the U.S. Department of Defense procurement of Chinese imports that compete with domestic industry if China's currency misalignment is contributing to the disruption of the U.S. industry;

* requires the U.S. Secretary of the Treasury to take action, obliging the Secretary of the Treasury to semi-annually analyze exchange-rate misalignment by any trading partner.

In addition, Sen. Jay Rockefeller (D-W.Va.), introduced The Strengthening of America's Trade Laws Act of 2007 (S. 364), which aims to help manufacturers compete on a level playing field with foreign competitors. Specifically, the bill addresses four key areas of U.S. trade policy, including currency manipulation.

The Rockefeller bill and the Fair Currency Act are similar in approach, making currency manipulation a countervailable export subsidy and actionable under countervailing duty law; however, S. 364 includes additional provisions to strengthen existing trade laws.

The American Foundry Society sent letters to the sponsors endorsing these bills, and members lobbied in support of these measures during the 2007 Government Affairs Conference in March.

For more information on these bills or trade matters, contact Stephanie Salmon in the AFS Washington Office at 202/842-4864 or [e-mail].