SPI Supports Grassley-Baucus Trade Enhancement Bill

The Society of the Plastics Industry has issued a statement applauding the work of Senators Charles Grassley (R-IA) and Max Baucus (D-MT) on the U.S. Trade Enhancement Act of 2006. Grassley, the chair of the Senate Finance Committee, and Baucus, the committee's ranking member, recently introduced the bill as a way to resolve "contentious currency and trade enforcement issues" between the U.S. and China as well as other countries.

If enacted, the bill would overhaul the existing legal framework under which the Treasury Department analyzes international exchange rate policies of major U.S. trading partners.

Under current law, the Treasury is authorized to cite countries for engaging in currency manipulation. The Grassley-Baucus bill would require finding that a currency is "fundamentally misaligned" with macroeconomic conditions. This change is intended to provide a clear definition for the Treasury to examine and take concrete action against exchange rate practices that adversely impact U.S. economic interests. In addition, the bill would provide specific penalties that could be imposed if a trading partner does not adopt adequate reforms to address the fundamental misalignment of its currency in a timely manner.