[Congressional Record Volume 150, Number 32 (Friday, March 12, 2004)]
[Senate]
[Pages S2778-S2791]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself, Mr. Bayh, Mrs. Dole, and Mr. Graham 
        of South Carolina):
  S. 2212. A bill to amend title VII of the Tariff Act of 1930 to 
provide that the provisions relating to countervailing duties apply to 
nonmarket economy countries; to the Committee on Finance.

[[Page S2791]]

  Ms. COLLINS. Mr. President, Our Nation's manufacturers can compete 
against the best in the world, but they cannot compete against nations 
that provide huge subsidies and other unfair advantages to their 
producers. I hear from manufacturers in my State time and time again 
whose efforts to compete successfully in the global economy simply 
cannot overcome the practices of illegal pricing and subsidies of 
nations such as China. The results of these unfair practices are lost 
jobs, shuttered factories, and decimated communities.
  Our Nation's trade remedy laws are intended to give American 
industries and their employees relief from the effects of illegal trade 
practices. Yet, while U.S. anti-dumping laws can be currently applied 
to non-market economies, countervailing duty laws cannot. It is time 
that this was changed.
  This is why I am introducing the ``Stopping Overseas Subsidies Act.'' 
This bill revises current trade remedy laws to ensure that U.S. 
countervailing duty laws apply to imports from non-market economies. It 
is simply not fair to prevent U.S. industries from seeking redress from 
these unfair trade practices because our trade remedy laws are 
outdated.
  Over the past two decades, there have been significant economic 
changes in many of the countries classified as non-market economies. 
This is particularly true in China, one of our largest trading partners 
and the country with which the United States currently runs its largest 
trade deficit.
  At the time our Nation's countervailing duty laws were approved in 
1979, it was impracticable to apply these laws to China. In 1979, 
China's economy was still centrally planned, and most of its economic 
output was directed and controlled by the state, which set production 
goals, controlled prices, and allocated the country's resources. When 
an entire economy is controlled by the government, it is difficult, if 
not impossible, to determine what defines a government subsidy that 
causes harm to U.S. industries.
  But beginning in the early 1980's and continuing today, China has 
undertaken major economic reforms. Today, China's economy is a far cry 
from being completely state-controlled. Government price controls on a 
wide range of products have been eliminated. Many enterprises and even 
entire industries have been allowed to operate and compete in an 
economic system that has elements of a free market. Many coastal 
regions and coastal cities in China have been designated as so-called 
``open'' cities and development zones, where there is a free market and 
tax and trade incentives are offered to attract foreign investment. 
And, of course, china has taken steps toward fully integrating into the 
global trading system by joining to the World Trade Organization and by 
working toward the establishment of a modern commercial, financial, 
legal, and regulatory infrastructure.
  The problem is not China's economic liberalization and modernization. 
The problem is this: now that China has the capacity to be a key 
international economic player, the country has repeatedly refused to 
comply with standard international trading rules and practices. And 
these violations include the use of subsidies and other economic 
incentives that are designed to give its producers an unfair 
competitive advantage.
  The most glaringly obvious subsidy comes in the form of currency 
manipulation. By keeping the Chinese yuan pegged to the U.S. dollar at 
artificially low levels, the Chinese undervalue the prices of their 
exports. Not only does this practice provide their producers with a 
price advantage, but also it violates the International Monetary Fund 
and WTO rules. The Chinese government also reimburses many enterprises 
for their operating losses and provides loans to uncreditworthy 
companies.
  Currently, U.S. industries have no direct recourse to combat these 
unfair practices. They instead must rely upon government-to-government 
negotiations or the dispute settlement processes of international 
organizations such as the WTO. While these channels might eventually 
lead to relief, it usually takes years to see results--and by that 
time, that industry could already be decimated.
  Mr. President, unfair market conditions cannot continue to cause our 
manufacturers to hemorrhage jobs. No State understands this more than 
my home State of Maine. According to a study by the National 
Association of Manufacturers, on a percentage basis, Maine has lost 
more manufacturing jobs in the past three years than any other State.
  There are many reasons for manufacturing job losses, including heavy 
tax and regulatory burdens. This is why I recently introduced a bill 
that would provide a variety of tax incentives for our Nation's 
manufacturers. However, without a level international playing field, 
tax reductions will not be enough to stop the flight of U.S. 
manufacturing jobs.
  Industries across Maine that produce products ranging from paper to 
footwear to furniture are being harmed by unfair trade practices, and 
it is time that we put a stop to it. I ask you to join me in supporting 
the SOS bill to ensure that all countries are held accountable for 
their trade practices.
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