“American workers are the best in the world and can compete with anyone when there is a level playing field. This Administration has vigorously enforced our trade laws and used dialogue, pressure, and litigation to produce real results in all aspects of our trade with China.

“We do not need to conduct an extensive 301 investigation to know that we have serious concerns about China's currency policy.  This Administration firmly believes that China needs to move toward a more flexible, market-based exchange rate for its currency.  That is why we have devoted unprecedented time and attention to urge the Chinese government to make this move.  As a result of our efforts, the Chinese have agreed that making the transition to a market-based exchange rate is one of their top priorities.  Governor Zhou of China's central bank, for example, declared that ‘building a more market-driven trading system for the renminbi is now a task of top priority.’

“With Secretary Snow's engagement, the Chinese are now actively working to modernize their financial infrastructure to prepare for a flexible exchange rate regime. China is taking action to liberalize capital flows, restructure its banks, and develop a currency derivatives market. These initial moves toward a more market-based exchange rate system are steps in the right direction. But China must continue to do more.  To ensure progress continues, we will act as aggressively as necessary to achieve results on this issue.

“China is deeply interested in being treated as a ‘market economy’ under U.S. law.  The first test China must meet is the extent to which its currency is convertible.  China's capital account liberalization in preparation for its move to a flexible exchange rate regime is also an important part of making its currency more convertible.  The Administration has made clear to China that it cannot expect to receive market economy status unless it continues its recent moves toward more market-based policies.

“In the last twelve months, over 1.7 million new U.S. jobs have been added to the American economy, and the unemployment rate today is lower than the average rate during the 1990s, 1980s, and the 1970s.

“Today's petition is reckless because the remedy it seeks of a 40 percent across the board tariff would put up walls around America, hurting U.S. exports, destroying U.S. jobs and endangering our economic recovery. It is a petition that has much less support in the U.S. business community than it did just four months ago, when the Administration last addressed this issue.

“In April, the Administration made it clear that accepting such a petition would be a retreat into economic isolationism. That is a path we would not take then, and it is a path we will not take today.

“Our policy is producing real results, expanded trade, and more jobs for Americans. Our policy offers more effective tools to move China toward a flexible, market-based exchange rate. Our policy rests on the principle that a strong and growing trade relationship, driven by mutual interests, is the best way to encourage reform in China.

“It was the right policy in 2000, when the Clinton Administration and 83 members of the U.S. Senate supported Permanent Normal Trade Relations with China.  It was the right policy in April of this year when four cabinet secretaries first addressed this issue.  It remains the right policy today.”