My family bought the Cummins Allison Corporation in 1942. My grandfather and father worked hard to build a company that today is known worldwide for its commercial coin and currency processing equipment and counterfeit detection systems. We employ nearly 1,200 Americans, the large majority of whom reside in the Chicago area. These workers and their families, along with the thousands of jobs we help to support through our vendors and service providers, contribute significantly to the local economy.
[Reposted from the Chicago Sun Times | William Jones | May 14, 2015]
All of our products are designed and manufactured in the Chicago area. We are the last U.S.-owned manufacturer of coin and currency authentication equipment. There used to be many other domestic companies in this important industry, protecting the integrity of our nation’s currency. But that was before Washington decided to open our economy to trade with countries that do not respect the rule of law or fair trade.
Thankfully, our research and development has been awarded dozens of high-quality patents that help to safeguard our proprietary technology. These patents have allowed us, as a single company, to combat foreign infringement. But we’ve still watched foreign firms take market share from us and put all other U.S. currency processing equipment firms out of business.
What really changed our industry was when the price of competing equipment from Japan and other East Asian competitors started dropping dramatically. This was our first encounter with “currency manipulation,” the process by which countries deliberately undervalue their currencies against the U.S. dollar.
To explain it simply, Japan lowers the value of its currency in order to boost exports. In fact, since 1991, Tokyo has intervened in currency markets 376 times. That currency manipulation makes their goods artificially cheap in the U.S. and other markets. And it makes U.S. goods more expensive when competing with Japanese products overseas. Though Cummins Allison has sold products throughout the world for many decades, we’ve never sold a single item in Japan due to their closed market and currency manipulation.
Over the past 25 years, I’ve watched this process unfold. I know my products can compete technology— and quality — wise with any imported product. However, even with strong patents, Cummins Allison cannot neutralize this currency advantage. That’s a job for the U.S. president Obama and Congress.
Unfortunately, four successive administrations have failed to confront Japan for its hostile currency manipulation, which violates world trade law. It’s astounding to me that presidents and congresses alike have failed to act, particularly when so many of our elected leaders claim to support free trade. The deliberate targeting of industries, with artificially lowered prices, runs completely counter to the integrity of a transparent, free market.
As bad as currency manipulation has been, it could get worse. Congress is now contemplating passage of a Trans-Pacific Partnership (TPP) trade agreement with 11 other nations, including Japan. And guess what — there is no mechanism anywhere in the proposed TPP to address currency manipulation.
In 2013, bipartisan majorities of both the House and Senate urged President Obama to tackle the currency issue in the TPP. Yet the President has refused to do so, which means a signed TPP could open the U.S. market to even more foreign goods subsidized by ongoing currency undervaluation.
If this practice is allowed to continue, even Cummins Allison could be forced to close after 127 years in business. That strikes me as wrong and unfortunate, not just for our company, employees, their families, vendors, and suppliers, but for a Chicago that’s struggling to retain good-paying, family-supporting middle class jobs.
Washington must stand up for honest and fair trade. Congress should say no to the TPP trade deal unless it contains strong and enforceable currency provisions. Here at Cummins Allison, all of our employees will be watching carefully to see if Congress truly supports free, fair and balanced trade, especially in currency.
William J. Jones is chairman of Chicago-based Cummins Allison.
