April 29, 2004

MSCI Statement on Section 301 Petition Rejection

MSCI Statement on Section 301 Petition Rejection

CHICAGO, April 29, 2004 – Metals Service Center Institute President and CEO M. Robert Weidner, III, issued this statement in response to the Bush administration’s rejection of the prospective filing of a Section 301 petition by the pro-manufacturing Fair Currency Alliance:

“The Metals Service Center Institute (MSCI), a founding member of the Fair Currency Alliance (FCA), strongly disagrees with the Bush administration’s decision to reject FCA’s prospective pro-manufacturing Section 301 petition related to Chinese currency manipulation. The cabinet officers are correct when they say some progress has been made with China. But the metals industry and North American manufacturers need more than a promise of institutional reform in China’s currency valuation. We need revaluation of the Renminbi, or yuan, based on market forces now.

“If progress has been made with China, it is largely because those of us who support manufacturing began last year to demand action. We described the damage done to our durable-goods manufacturing base with Washington policymakers who, previously, were all but completely oblivious to the problem. We told them about the market distortions caused, among other things, by China’s artificially undervalued currency. We made it clear that more must be done. Our lawful Section 301 petition is designed to address the mercantilist behavior of China and to seek appropriate relief from their illegal actions. We cannot now simply fold our tents and withdraw. We will continue to inform members of congress about this critical issue and will urge them to support our pro-manufacturing legislative agenda.

“We are not economic isolationists. We believe in free and fair trade for goods, services, and currencies. By pegging the yuan’s value to the U.S.dollar, China has deliberately chosen to undervalue its currency to gain mercantile advantage. Our response is not litigation for litigation’s sake. It is our best effort, under U.S.law, to use the tools available to us to achieve a level playing field in global trade. We believe that just as the U.S. is held accountable by its global trade agreements, other governments, including China, must beheld equally accountable. It is not enough for China to say it might alter the yuan’s valuation some day. It is not enough to provide technical assistance leading to the revaluation of the yuan, we need real results now.

 “We are willing to work with the administration to this end. Yet we encourage the FCA to maintain its focus on all the issues raised in its pending Section 301 petition. We call on the leaders of all 40 FCA member trade associations to meet in Washington within the next 30 days to plan next steps. We urge Congress to approve all pending pro-manufacturing legislation.”

Founded in 1907, the non-partisan Metals Service Center Institute has more than 375 members operating from about 1,200 locations in the U.S.,Canada, Mexico,and elsewhere around the world. Together, MSCI members constitute the largest single group of metals purchasers in North America, amounting each year to more than 75 million tons of steel, aluminum, and other metals, with about 300,000 manufacturers and fabricators as customers. Metals service centers distribute metals and provide first-stage fabrication services.