[Congressional Record Volume 154, Number 101 (Wednesday, June 18, 2008)]
[Senate]
[Pages S5742-S5743]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  STRATEGIC ECONOMIC DIALOG WITH CHINA

  Mr. BROWN. Madam President, today the administration is concluding 
its much-heralded fourth session of the strategic economic dialog with 
officials from the Chinese Government. Obviously, there have been three 
of these previous to this, when Secretary Paulson, Secretary of the 
Treasury, the brain of the Bush administration's economic policy, a 
very successful Wall Street banker who came to Washington amid all 
kinds of plaudits from at least Wall Street and many of the newspaper 
publishers and editors who side with Wall Street on most issues--
Secretary Paulson is an honorable, decent man. He went to China again 
to engage in these strategic economic dialogs.
  The big announcement today from these strategic economic dialogs, 
SEDs, is an agreement to begin negotiations for a bilateral investment 
treaty. That is all he has agreed to do with the Chinese, is to talk 
about how we can help American investors in China get a fair shake from 
the Chinese Government. Of all the pressing issues we are currently 
facing in our bilateral relationship with China, Secretary Paulson 
chose to emphasize issues, frankly, that only stand to benefit the 
largest investors, the largest mutual funds, the largest hedge funds, 
the people on Wall Street who have benefitted the most from this global 
economy, the largest corporations that are outsourcing jobs to China. 
That is who benefits from these four strategic economic dialogs.
  The focus on improving the Chinese stock market and increasing 
opportunities for foreign investors in China only stands to benefit 
major U.S. investors and large American companies that are considering 
moving offshore to China.
  Secretary Paulson should have focused on issues that hurt American 
workers, the impact of the undervalued Chinese currency--part of the 
work of the junior Senator from Michigan in the Finance Committee--and 
Secretary Paulson should have been working to fix the lack of effective 
intellectual property rights enforcement in China, should have worked 
to correct the soaring bilateral trade deficit of $57 billion--$57 
billion just for the first quarter of this year, up 20 percent over 
last year and on pace to set another record high, $57 billion. That 
means--doing the math quickly--$600 million or $700 million. Every 
single day, we buy $600 million or $700 million of imports from China 
more than we sell to China--every single day. You do not think that is 
a big reason plants close in Tiffin and Fostoria and Zanesville and 
Cleveland, and in Lansing, Kalamazoo, and Detroit, MI?

  Instead, Secretary Paulson is looking out for investors rather than 
workers, rather than communities--communities such as Mansfield and 
Portsmouth and Chillicothe. When a plant closes, firefighters are laid 
off, police officers are laid off, teachers are laid off. Quality of 
life diminishes every time we lose these jobs to China.
  I would hope Secretary Paulson would consider the needs of the vast 
majority of Americans who would be better served by a different set of 
priorities, a different trade relation with China, not trying to fix 
the Chinese stock market and help U.S. investors and large corporations 
in the United States that are only looking for more offshoring 
opportunities. Yet, as the administration concludes its fourth 
Strategic Economic Dialogue, it has become clear that the SED has been 
an exercise in talking with no action.
  Since the first SED in December 2006--he has done a couple of these 
every year--the U.S. trade deficit with China has grown $25 billion per 
year. We have lost 581,000 manufacturing jobs. There have been at least 
457--think about this--457 ``Made in China'' recalls by the Consumer 
Product Safety Commission. That is not counting what happened with 
heparin, the contaminated ingredients that went into a drug that killed 
several people in Toledo, OH. It is not even counting that. That is 457 
``Made in China'' products recalled by the Consumer Product Safety 
Commission.
  New Government reports, from various agencies, have given us new 
information that poses challenges to our relationship with China. The 
EPA--get this--it does not affect my part of the country quite as 
much--estimates that 25 percent of California's air pollution comes 
directly from China.
  The State Department, meanwhile, released its annual ``Trafficking in 
Persons Report,'' which found significant problems with forced labor, 
including forced child labor, in the People's Republic of China. This 
is the fourth year in a row that China was put on a ``watch list'' of 
countries that could face sanctions if they do not improve their record 
on trafficking in persons. So where does it talk about this in the 
Strategic Economic Dialogue? Secretary Paulson wants to help American 
investors, wants to help U.S. companies that are going to go offshore, 
wants to help strengthen and repair the Chinese stock market. There is 
nothing about consumer product safety recalls, nothing about currency 
devaluation costing us jobs, nothing about trafficking in people and 
what that means to children and what that means to families.
  In December 2006, when the Bush administration announced the 
Strategic Economic Dialogue with China, nearly 2 years ago, Treasury 
Secretary Paulson said the SED would focus on five specific areas. 
These were his own promises. These are not my opinions. These are not 
my advice or my counsel or my suggestions. These are what Secretary 
Paulson said he would focus on:
  No. 1, the first was ``Managing financial and macroeconomic cycles.''
  China utilizes numerous questionable subsidies to artificially boost 
production, including $27 billion in energy subsidies since 2000 for 
steel producers. Think about how uncompetitive that is and what it does 
to our steel industry and what it does to global warming because they 
do not have the same environmental rules and regulations on their steel 
industry as we rightly--rightly--have on our steel industry. Chinese 
steel production has increased more than 50 percent in the last 4 
years. Steel exports to the United States are 129 percent higher than 
they were 3 years ago. That is more than twice as much steel imports 
from China to the United States.
  The second was ``Developing human capital.''
  As I just mentioned, China's human rights abuses are notorious, as 
are their woefully inadequate labor conditions in many factories--not 
to mention child labor and all they do that way.
  Third--one of Secretary Paulson's focuses of his five specific 
areas--``the benefits of trade and open markets.''

[[Page S5743]]

  Beijing continues to undervalue its currency--as the Presiding 
Officer has said in the Finance Committee--by as much as 40 percent. 
Yet just last week, China's Ambassador to the World Trade Organization 
chastised the United States--chastised us, with whom they have a $200 
billion-plus trade surplus on their end--a deficit on ours--chastised 
the United States for the dollar's depreciation. In some ways, it is 
hard to argue with that, that our economic policies have caused this 
weaker dollar because of the Bush administration's wrong actions in 
some cases and inaction in others.
  USTR has called China's counterfeit and piracy problems rampant, yet 
has done little to ensure compliance for American companies.
  The fourth promise Secretary Paulson made in December 2006 about its 
focus on the Strategic Economic Dialogue was--his term--``Enhancing 
investment.''
  This is one area the administration perhaps is addressing with the 
Bilateral Investment Treaty. I will give him one out of the first four.
  Fifth, and finally, Secretary Paulson said, ``Advancing joint 
opportunities for cooperation in energy and the environment.''
  This Congress is weighing the merits of different climate change 
proposals, but one thing is certain: This Congress will pass 
legislation curbing carbon emissions. We need to do it in a way that 
ensures we do not just rely on Chinese imports that arrive in the 
United States without a carbon cost.
  So, in other words, on four of the five, Secretary Paulson fell far 
short or simply did not even address it. Think what happens with our 
passing climate change if the Chinese do not pass any climate change 
and the Chinese do not strengthen their regulations on carbon emissions 
and other pollutants.
  That means our factories--which have difficulty competing because of 
the cost of labor and all of that--our factories will have even more 
difficulty competing in Pennsylvania, Ohio, Michigan, and California 
and in all of the country because we will strengthen our environmental 
rules, as we should, we will reduce carbon emissions, as we should. The 
Chinese will benefit from that because they do not absorb the cost, 
they do not bear the cost of these kinds of environmental rules and 
regulations. So they get even more of a competitive advantage. What 
happens if a plant shuts down in Youngstown or shuts down in 
Steubenville or shuts down in Dayton and moves to China? Plants that 
were following decent emission standards move to China, and their 
carbon emissions are hardly regulated. So it means lost jobs for us. It 
means more pollution, more carbon emissions for the world from the 
People's Republic of China. It is another example of Secretary Paulson 
simply not addressing the issues that matter to our families, to our 
communities, to our workers, and to our country.
  It is clear the Strategic Economic Dialogue has been lots of talk and 
no action. It is time for actions from the administration that benefit 
American workers, benefit American manufacturers, benefit American 
businesses, and protect consumers. It is time for a new direction in 
our trade policy with the People's Republic of China.
  I thank the Presiding Officer and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SALAZAR. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SALAZAR. Madam President, I ask unanimous consent that I be 
permitted to speak as in morning business for as much time as I may 
consume.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Colorado.

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