By:     Chris Pearce

June 2003 – For the second time in as many months, an AFMA member company executive presented testimony on Capitol Hill on an issue affecting the competitiveness of domestic furniture manufacturers. On June 25, Edward M. Tashjian, Vice President of Marketing for Century Furniture, told the House Small Business Committee that China’s currency manipulation unfairly places American manufacturers at a competitive disadvantage, and threatens the continued viability of domestic production. AFMA has joined leading manufacturing groups in expressing concern that by not allowing the market to determine its currency exchange rates and by keeping its currency, the yuan, intentionally undervalued, China has gained a competitive advantage for its exports. Mr. Tashjian’s testimony called on Congress and the Administration to pressure China to end these practices and allow its currency to be set by the marketplace.

“By pegging the yuan to the dollar, an exporting nation like China has in effect undervalued its currency by as much as 30 to 50 percent. This is tantamount to a 30 to 50 percent tariff on U.S. products in our own marketplace. The World Trade Organization and the International Monetary Fund have clearly stated that currency manipulation, done to gain an unfair competitive advantage, is illegal in the global trading system. Therefore, it is vitally important that U.S. trade authorities monitor and enforce China’s obligations in this area, and ensure that the timetables for action embodied in the WTO agreement are met. Free trade must also be fair and legal trade, and I would urge this panel, as well as the Bush Administration, to stand firm in the pursuit of fair valuation,” Tashjian told committee members.

The Small Business Committee’s hearing on foreign currency manipulation was one in a series of hearings examining challenges facing both small and medium-size domestic manufacturers.

Click here to view a copy of Mr. Tashjian’s prepared testimony.