Washington: Two top American Senators have asked the Obama Administration to drag China to the World Trade Organisation (WTO) on the currency issue.
Addressing China's currency policy in a multilateral manner holds the greatest promise for an effective and meaningful solution, Senators Max Baucus and Dave Camp wrote in a letter to the US Treasury Secretary, Timothy Geithner, and the US Trade Representatives, Ron Kirk.
"The Administration's efforts at the G20 have helped to develop an international consensus about how important it is for China to rebalance its economy and allow its currency to more accurately reflect market forces," the letter said.
Baucus is Chairman of the Senate Committee on Finance, while Camp is Chairman of the Senate Committee on Ways and Means.
China will not end its currency undervaluation unless the US seizes opportunities like this to insist it does, the Senators felt, adding that expanding and intensifying discussions at the WTO can further this effort and bring significantly more pressure to bear on China.
"Today we write to focus on one aspect of this issue: the opportunity in the World Trade Organization (WTO) to discuss the role of exchange rate practices in trade policy," they said.
Supporting the ongoing efforts at the WTO to understand the impact on trade of exchange rate policies, the Senators said the WTO Secretariat's recently concluded literature survey is a positive first step towards understanding the relationship between trade and exchange rate policies.
