Rather than simply touting the benefits of free trade, the Society of the Plastics Industry Inc. has a new trade policy that asks for U.S. government intervention to lower the value of the dollar.
SPI says it is maintaining its traditional free-trade approach, but is concerned that the sharp rise in the dollar's value against other currencies since 1997 makes U.S. exports more expensive and hurts the industry's ability to compete.
The decision is a bit of a shift for Washington-based SPI, and comes as concerns about trade seem to be on the rise. The U.S. government recently launched a formal investigation into allegations of unfair trade practices by overseas mold makers, for example.
U.S. plastics firms have complained about the strong dollar, SPI said.
``The impact varies from sector to sector but it certainly does have an impact,'' said Lori Anderson, SPI's senior director of international and economic affairs. SPI does not have any specific figures, she said.
Frank Vargo, the top trade official at the National Association of Manufacturers in Washington, said the strong dollar is the biggest trade complaint his group hears. NAM provided advice to SPI, which announced the new policy Jan. 22.
``The dollar is up an astonishing 30 percent over 1997,'' Vargo said. ``If you are a small manufacturer, suddenly you find your customers [overseas] are saying your prices are 10 percent higher, or 15 percent higher, or 30 percent higher.''
According to NAM data, small and medium-size manufacturers appear to be having a tougher time exporting. The trade association said that only 3.8 percent of those firms exported 25 percent or more of their production in 2001 - the lowest level since 1993, and down from 8.8 percent in 1998.
NAM wants the U.S. government to oppose Japan's attempt to devalue the yen to boost its recovery, and NAM also wants the world's leading economies to agree that exchange rates are ``badly misaligned'' and to bring down the U.S. dollar, Vargo said.
The U.S. dollar is generally rising compared with foreign currencies. One euro was worth $1.18 when it started trading in late 1998, compared with about 86 cents now. One Canadian dollar was worth about 74 cents in January 1997, compared with 63 cents today.
And the yen has gotten weaker against the dollar in recent months. In January 1997, $1 was worth 117 yen. That fell to 103 yen in April 2000, but since has risen to 132 yen to the dollar.
But U.S. government officials favor a strong dollar.
Treasury Secretary Paul O'Neill told Reuters on Jan. 31 that good manufacturers ``don't live and die on exchange rates. ... They don't go around looking for some government to give them relief with foreign exchange-rate conversion or grants from the people or anything else.''
Besides the statement on the dollar, SPI's policy includes three other points that Anderson said always have been part of the group's philosophy:
* Support trade promotion authority, which would give the president the authority to negotiate trade deals that Congress must accept or reject but cannot amend.
* Pursue free and fair trade by reducing tariffs and nontariff barriers worldwide.
* Monitor and enforce existing trade agreements.