Manipulating the WTO? Challenging Undervalued Exchange Rates Under WTO Rules

Amsterdam Center for International Law Research Paper Series 2010

18 Pages Posted: 6 Mar 2010

See all articles by Catharina E. Koops

Catharina E. Koops

University of Amsterdam - Amsterdam Center for International Law; University of Amsterdam - Amsterdam Centre for European Law and Governance

Date Written: March 3, 2010

Abstract

The Chinese exchange rate policy is a hotly debated topic. Comments are heard from politicians, economists and lawyers alike, with fingers pointed at the Renminbi (RMB) undervaluation blaming it for job loss in the United States or for causing the credit crisis by creating global imbalances and a search for yield through a low interest rate environment. Most of the criticism focuses on the trade effects of undervalued currencies, where an unfair trade advantage is gained by China “manipulating” its currency.

This paper investigates what options exist under WTO/GATT provisions for members that would like to take trade actions against countries that have undervalued currencies. It will be put forward that the WTO rules do not provide the solution for countering the trade effects of undervalued currencies. The only correct forum for dealing with exchange rate issues and undervaluation is the IMF.

Keywords: currency manipulation, trade remedies, WTO, IMF

JEL Classification: F1, F3, K33, K41, K42

Suggested Citation

Koops, Catharina E., Manipulating the WTO? Challenging Undervalued Exchange Rates Under WTO Rules (March 3, 2010). Amsterdam Center for International Law Research Paper Series 2010, Available at SSRN: https://ssrn.com/abstract=1564093 or http://dx.doi.org/10.2139/ssrn.1564093

Catharina E. Koops (Contact Author)

University of Amsterdam - Amsterdam Center for International Law ( email )

P.O. Box 1030
Amsterdam, 1000 BA
Netherlands

University of Amsterdam - Amsterdam Centre for European Law and Governance ( email )

P.O.Box 1030
Amsterdam, 1000 BA
Netherlands

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