[Congressional Record Volume 151, Number 28 (Thursday, March 10, 2005)]
[Senate]
[Pages S2486-S2487]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself, Mr. Bayh, Mr. Burr, Mr. Santorum, 
        Mr. Schumer, Mr. DeWine, Mr. Durbin, Mrs. Dole, Mr. Byrd, Ms. 
        Mikulski, Mr. Graham, Mr. Lieberman, Mr. Pryor, Mrs. Lincoln, 
        Mr. Rockefeller, Mr. Baucus, and Mr. Lott):
  S. 593. 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.
  Ms. COLLINS. Mr. President, our Nation's manufacturers and their 
employees 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

[[Page S2487]]

China. The results of these unfair practices are lost jobs, shuttered 
factories, and decimated communities.
  Consider this one example. The American residential wood furniture 
industry has experienced devastating losses due to surges of unfairly 
priced furniture imports from China. According to the U.S. Bureau of 
Labor, 34,700 jobs, or 28 percent of the workforce, have been lost in 
the U.S. furniture industry since 2000. One furniture manufacturer in 
Maine, Moosehead Manufacturing, was forced to eliminate a quarter of 
its employees due to the unfair market conditions it faces.
  Unfairly priced imports from China are a leading cause in these job 
losses. China's wooden bedroom furniture exports to the U.S., which 
amounted to just $169 million in 1999, reached an estimated $1.2 
billion in 2003. By subsidizing investments in furniture manufacturing 
facilities, China is exploiting the U.S. market to the benefit of its 
producers and putting our employees at an unfair advantage.
  This is why I am introducing the ``Stopping Overseas Subsidies Act,'' 
a bill I introduced in the 108th Congress. I am pleased to be joined by 
my good friend and colleague from Indiana, Senator Bayh, who has worked 
closely with me on this legislation. This bill revises current trade 
remedy laws to ensure that U.S. countervailing duty laws apply to 
imports from non-market economies, such as China.
  Our Nation's trade remedy laws are intended to give American 
industries and their employees relief from the effects of illegal trade 
practices. Unfortunately, some countries in the world choose to cheat 
instead of compete fairly. In these cases, U.S. industries can file 
petitions under U.S. trade remedy laws for relief. Under current 
Commerce Department practice, however, U.S. industries competing with 
these unfairly advantaged foreign producers can file an anti-subsidy 
petitions against any market economy--such as Canada or Chile--but not 
against a non-market economy such as China. As a result, those 
countries, such as China, that subsidize their industries the most 
heavily and cause the most injury to U.S. industries and workers are 
exempt from the reach of American anti-subsidy laws.
  It is time that this was changed. 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.
  Beginning in the early 1980's and continuing today, China has 
undertaken major economic reforms. Today, China's economy is not 
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. And, of course, China has 
taken steps toward fully integrating into the global trading system by 
joining 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.
  Perhaps the most glaring 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 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 on 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.
  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 recent study by the National Association of 
Manufacturers, on a percentage basis, Maine lost more manufacturing 
jobs in the previous three years than any other state. This is why 
organizations such as the Maine Forest Products Council and the Maine 
Wood Products Association have strongly endorsed my proposal.
  The Stopping Overseas Subsidies bill is a bipartisan, bicameral bill 
that has a broad range of support across many industries and 
geographical areas. A companion bill is being introduced today in the 
House by Representatives Phil English of Pennsylvania and Artur Davis 
of Alabama. Last year, the Senate bill had eighteen cosponsors.
  I am proud that over twenty organizations and a number of private 
companies, representing a range of industries, have endorsed this bill. 
Some of these organizations include: The American Forest & Paper 
Association, the National Council of Textile Organizations, the 
Printing Industries of America, the Steel Manufacturers Association, 
and the Catfish Farmers of America. Of particular note, the National 
Association of Manufacturers has endorsed this bill and has listed it 
as one of its top trade agenda items in 2005.
  In addition, the United States Economic and Security Review 
Commission, a bipartisan organization established by Congress in 2000 
to provide recommendations to Congress on the relationship between the 
United States and China, has endorsed the goals of this bill. In its 
annual report to Congress in June 2004, the Commission stated, ``U.S. 
policy currently prevents application of countervailing duty laws to 
nonmarket economy countries such as China. This limits the ability of 
the United States to combat China's extensive use of subsidies that 
give Chinese companies an unfair competitive advantage. The Commission 
recommends that Congress urge the Department of Commerce to make 
countervailing duty laws application to nonmarket economies. If 
Commerce does not do so, Congress should pass legislation to achieve 
the same effect.''
  U.S. industries don't want protection--they want fair competition. 
Illegal subsidies distort fair competition, regardless of the economic 
system in which they are used. Our legislation simply levels the 
playing field by allowing anti-subsidy petitions to be brought against 
non-market economies in addition to market economies.
  Countries such as China want to have all the benefits of engaging in 
international trading institutions and systems and continue to cheat on 
the system with no penalties. It is time these countries were held to 
the same standards as other countries around the world. 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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