Inside US-China Trade
March 31, 2010
Currency Witnesses See WTO As Part Of Multilateral Push for Revaluation
Vol. 10 No. 13
If China should refuse to engage in serious discussions and actions that would deal with its undervalued currency, Prestowitz said the U.S. and interested countries should file complaints in the WTO and the IMF. The WTO case could be filed claiming that the undervalued currency is a prohibited export subsidy or that it nullifies and impairs China's obligations in the WTO, he testified.
Prestowitz strongly urged that the U.S. should also take unilateral action such as imposing tariffs on Chinese goods or initiate unfair trade actions if multilateral efforts fail to solve the currency problem. Bergsten appeared cool to the idea of unilateral action, while Ferguson strongly opposed it as leading to a dispute with China that could have devastating consequences for the global economy. Levy also warned of proceeding aggressively against China for fear of causing a major economic crisis.
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