[Congressional Record Volume 156, Number 133 (Wednesday, September 29, 2010)]
[House]
[Pages H7259-H7273]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CURRENCY REFORM FOR FAIR TRADE ACT
Mr. LEVIN. Mr. Speaker, pursuant to House Resolution 1674, I call up
the bill (H.R. 2378) to amend title VII of the Tariff Act of 1930 to
clarify that fundamental exchange-rate misalignment by any foreign
nation is actionable under United States countervailing and antidumping
duty laws, and for other purposes, and ask for its immediate
consideration.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 1674, the
amendment in the nature of a substitute recommended by the Committee on
Ways and Means, printed in the bill, is adopted and the bill, as
amended, is considered read.
The text of the bill, as amended, is as follows:
H.R. 2378
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Currency Reform for Fair
Trade Act''.
[[Page H7260]]
SEC. 2. CLARIFICATION REGARDING DEFINITION OF COUNTERVAILABLE
SUBSIDY.
(a) Benefit Conferred.--Section 771(5)(E) of the Tariff Act
of 1930 (19 U.S.C. 1677(5)(E)) is amended--
(1) in clause (iii), by striking ``and'' at the end;
(2) in clause (iv), by striking the period at the end and
inserting ``, and''; and
(3) by inserting after clause (iv) the following new
clause:
``(v) in the case in which the currency of a country in
which the subject merchandise is produced is exchanged for
foreign currency obtained from export transactions, and the
currency of such country is a fundamentally undervalued
currency, as defined in paragraph (37), the difference
between the amount of the currency of such country provided
and the amount of the currency of such country that would
have been provided if the real effective exchange rate of the
currency of such country were not undervalued, as determined
pursuant to paragraph (38).''.
(b) Export Subsidy.--Section 771(5A)(B) of the Tariff Act
of 1930 (19 U.S.C. 1677(5A)(B)) is amended by adding at the
end the following new sentence: ``In the case of a subsidy
relating to a fundamentally undervalued currency, the fact
that the subsidy may also be provided in circumstances not
involving export shall not, for that reason alone, mean that
the subsidy cannot be considered contingent upon export
performance.''.
(c) Definition of Fundamentally Undervalued Currency.--
Section 771 of the Tariff Act of 1930 (19 U.S.C. 1677) is
amended by adding at the end the following new paragraph:
``(37) Fundamentally undervalued currency.--The
administering authority shall determine that the currency of
a country in which the subject merchandise is produced is a
`fundamentally undervalued currency' if--
``(A) the government of the country (including any public
entity within the territory of the country) engages in
protracted, large-scale intervention in one or more foreign
exchange markets during part or all of the 18-month period
that represents the most recent 18 months for which the
information required under paragraph (38) is reasonably
available, but that does not include any period of time later
than the final month in the period of investigation or the
period of review, as applicable;
``(B) the real effective exchange rate of the currency is
undervalued by at least 5 percent, on average and as
calculated under paragraph (38), relative to the equilibrium
real effective exchange rate for the country's currency
during the 18-month period;
``(C) during the 18-month period, the country has
experienced significant and persistent global current account
surpluses; and
``(D) during the 18-month period, the foreign asset
reserves held by the government of the country exceed--
``(i) the amount necessary to repay all debt obligations of
the government falling due within the coming 12 months;
``(ii) 20 percent of the country's money supply, using
standard measures of M2; and
``(iii) the value of the country's imports during the
previous 4 months.''.
(d) Definition of Real Effective Exchange Rate
Undervaluation.--Section 771 of the Tariff Act of 1930 (19
U.S.C. 1677), as amended by subsection (c) of this section,
is further amended by adding at the end the following new
paragraph:
``(38) Real effective exchange rate undervaluation.--The
calculation of real effective exchange rate undervaluation,
for purposes of paragraph (5)(E)(v) and paragraph (37),
shall--
``(A)(i) rely upon, and where appropriate be the simple
average of, the results yielded from application of the
approaches described in the guidelines of the International
Monetary Fund's Consultative Group on Exchange Rate Issues;
or
``(ii) if the guidelines of the International Monetary
Fund's Consultative Group on Exchange Rate Issues are not
available, be based on generally accepted economic and
econometric techniques and methodologies to measure the level
of undervaluation;
``(B) rely upon data that are publicly available, reliable,
and compiled and maintained by the International Monetary
Fund or, if the International Monetary Fund cannot provide
the data, by other international organizations or by national
governments; and
``(C) use inflation-adjusted, trade-weighted exchange
rates.''.
SEC. 3. REPORT ON IMPLEMENTATION OF ACT.
(a) In General.--Not later than 9 months after the date of
the enactment of this Act, the Comptroller General of the
United States shall submit to Congress a report on the
implementation of the amendments made by this Act.
(b) Matters to Be Included.--The report required by
subsection (a) shall include a description of the extent to
which United States industries that have been materially
injured by reason of imports of subject merchandise produced
in foreign countries with fundamentally undervalued
currencies have received relief under title VII of the Tariff
Act of 1930 (19 U.S.C. 1671 et seq.), as amended by this Act.
The SPEAKER pro tempore. The gentleman from Michigan (Mr. Levin) and
the gentleman from Michigan (Mr. Camp) each will control 30 minutes.
The Chair recognizes the gentleman from Michigan (Mr. Levin).
Mr. LEVIN. Mr. Speaker, I yield myself 3 minutes.
(Mr. LEVIN asked and was given permission to revise and extend his
remarks.)
Mr. LEVIN. Colleagues, this is an important moment for this House and
for the people of our Nation. There is a real problem--China's
persistent manipulation of its currency. That requires real action, and
under our leadership, real action is now being taken in this House.
China's practices represent, as the Secretary of the Treasury
indicated in his testimony before us, ``a major distortion in the
global economy.''
For our country, it is impacted on our trade deficit with China--in
2009, $226 billion--and it is impacted on our jobs. Their goods come to
us, as a result of their manipulation, cheaper, and our goods to them,
more expensive. There is a 15-35 or 40 percent imbalance, a tilted
field of competition. The estimates mean 500,000 to 1.5 million jobs.
This manipulation is one of the causes of the outsourcing of our jobs--
of manufacturing and other good jobs.
Talk hasn't worked. Less than 2 percent appreciation has occurred
since just before the last G-20 meeting when the Chinese said that they
would make their currency more flexible.
Additional steps are needed, and this bill is just such a step. So,
after 2 days of hearings before our committee, I worked over the
weekend with our majority staff to modify, to make sure this bill was
fully compliant with our international WTO obligations. It is
compliant.
China has an economic strategy. For our businesses and workers, it is
vital that our Nation has an active economic strategy, and this is one
important piece of that strategy.
I strongly urge support of this legislation, and I reserve the
balance of my time.
Mr. CAMP. I yield myself such time as I may consume.
Mr. Speaker, let me start by saying it is truly disappointing that
this is the only trade bill in the past 2 years that has been marked up
by the Ways and Means Committee. I find it unacceptable that this is
the sum total of our trade agenda. While this legislation addresses an
important issue, it will not address many more pressing trade concerns
with China, and it will not advance the goal of doubling exports in 5
years.
To achieve those goals, we must move expeditiously on the pending
free trade agreements, work harder to open new markets to our exports,
and address broader economic issues all over the world and with China.
{time} 1610
We have held four separate hearings on China this year alone. At
each, we heard from witnesses, including Treasury Secretary Geithner,
who stressed that China's currency policy is only one element in our
highly complicated trading relationship.
It's not that China's currency problem is not a problem or priority;
it's just that there are far larger issues with regard to China and our
trade imbalance. Issues like intellectual property rights, indigenous
innovation, export restraints on rare earth minerals and other items,
and a host of nontariff barriers are wreaking havoc on American
employers, their workers, and our economy.
Despite my disappointment about the lack of a broader trade agenda
and the lack of action on these other concerns with respect to China,
it would be an enormous mistake to give up completely on addressing
China's currency policy. We all agree that China's currency is
fundamentally misaligned and that China must take prompt action to
allow market forces to determine the value of its currency.
At the same time, it is important that any legislation be consistent
with our international obligation and be effective. Any legislation
that could potentially expose the United States to WTO-sanctioned
retaliation would undoubtedly do more harm than good and would
undermine our efforts to get China to comply with its own obligations.
At our hearings over the past few weeks, a number of witnesses and
Republican Members raised serious concerns about the WTO consistency of
the original version of H.R. 2378. As a result of these concerns,
Chairman Levin completely rewrote the bill. The version before us today
has little in common with the original, which, on its face, violated
our WTO obligation. It addresses many of the criticisms raised by
witnesses and by Republican Members, and I appreciate that the chairman
has taken these concerns into account.
[[Page H7261]]
Unlike the original version, this bill does not mandate that the
Commerce Department automatically adjust antidumping and countervailing
duty calculations to account for China's currency policy. This version
allows Commerce to consider many factors in determining whether or not
China's currency policy satisfies the technical definition of an export
subsidy, as it does today, and does not prejudge an outcome.
While I remain deeply concerned about using countervailing duty law
to address China's currency policy, I believe the bill before us today
does not, on its face, violate our WTO obligations.
I will vote for this bill because it sends a clear signal to China
that Congress' patience is running out but does not give China an
excuse to retaliate against U.S. companies and their workers. While we
cannot pass legislation that likely violates our WTO commitments and
would result in WTO-sanctioned retaliation, we cannot, at the same
time, allow ourselves to be afraid of China's reaction to a WTO-
consistent measure.
If China retaliates against this bill at this stage, I fully expect
that USTR, and the administration as a whole, will act swiftly and
aggressively to pursue every option available, including through action
at the WTO. China's posturing and bad behavior cannot dictate our trade
policy.
This legislation also sends an important signal to the
administration: It is time to produce results. The administration must
step up its bilateral and multilateral efforts and set a clear timeline
for action. The administration should work to ensure that the issue of
global imbalances, which naturally includes China's currency policy, is
prominently on the agenda at the November G20 meetings in Seoul. We
should also reengage in bilateral investment treaty negotiations.
As I noted at our markup, the fact that the administration has not
moved aggressively on a multilateral basis has forced us to this point.
The legislation we are considering today is better than the original
but still won't resolve our trade imbalances with China.
Mr. Speaker, I yield the balance of my time to the gentleman from
Texas (Mr. Brady), and I ask unanimous consent that he be allowed to
control that time.
The SPEAKER pro tempore (Mr. Capuano). Is there objection to the
request of the gentleman from Texas?
There was no objection.
Mr. LEVIN. I yield myself 15 seconds.
That statement really rewrites the history of this legislation. I
suggest to everybody, go back and look at the opening statement of the
ranking member. Also, we have urged support of the green 301 petition.
Only three Republicans supported it. I regret the partisan inflection
here. I won't engage in it. I hope we get bipartisan support.
I now yield 1\1/2\ minutes to the gentleman from Washington (Mr.
McDermott), a gentleman who is so actively engaged on these issues.
(Mr. McDERMOTT asked and was given permission to revise and extend
his remarks.)
Mr. McDERMOTT. Mr. Speaker, there is an old Chinese proverb that
says, ``A journey of a thousand miles begins with a single step,'' and
I rise today in support of this legislation which is before us to take
the first step toward addressing the egregious imbalance between
China's currency and our own.
For too long, the Chinese have not been playing fairly in the
international trade arena, and this Congress has to send a clear
message that China must become a responsible player in a multilateral
trade. The Chinese export-driven strategy is smart, but subsidizing by
suppressing their currency is an unfair way to do it.
This legislation is a good step, but it's not my preferred step. I
would prefer the United States, together with our partners, bring a
multilateral WTO case against China on the currency issue. Absent that,
this commonsense legislation helps the Commerce Department do a fair
job of making the multilateral mechanisms more available to U.S.
businesses.
This legislation sends a clear signal that the American people
respect international agreements and expect fairness. After years of an
unlevel playing field, it is time to act, and this legislation is the
right kind of measured first step we must take now.
I urge the passage of this bill.
Mr. BRADY of Texas. Mr. Speaker, I yield myself such time as I may
consume.
I appreciate the effort, Mr. Speaker, by Chairman Levin to address
the concerns of Ranking Member Camp and other Republican Members that
were raised at our various hearings. And while the revised version
addresses the WTO consistency issue, my view is that, on balance, the
promises that this bill makes to compel China to appreciate its
currency to reduce the trade deficit and to create U.S. jobs won't be
realized, and, therefore, I oppose this bill.
Rather than focus on China's currency policy alone, a priority must
be creating American jobs by promoting U.S. exports, and this bill
doesn't do enough to provide new market access for American businesses,
farmers, and workers. If we are to meet the President's goal of
doubling exports, we must focus our energy on tearing down real
substantive barriers to U.S. access to China's consumers. We must
require China to better U.S. intellectual property rights and end its
directed lending, cease its innovative policy, and move other
artificial barriers to U.S. exports. Such an effort would benefit
thousands more American workers than the focus on China currency alone.
I am concerned that moving on this bill makes it more difficult for
us to resolve these other issues, and I think we ought to be careful to
avoid doing more harm than good in tearing down these barriers.
Breaking down barriers to U.S. exports is difficult work and requires
concerted effort by Congress and the administration. To begin with,
rather than merely paying lip service to new and pending trade
agreements, we have to find a way to move these agreements forward.
Currently, there is no clear end date for concluding the Trans-
Pacific partnership negotiations, no plan from the administration on
how it intends to resolve issues related to the U.S.-Colombian, -Panama
trade agreements, and just limited discussion on the U.S.-South Korea
trade agreement.
The administration must also return to the negotiating table and
complete bilateral investment treaty negotiations with China. Entering
into a bit with China could help on many of these issues and is
necessary to ensure that Americans have the same rights in China as our
other trading partners.
Mr. Speaker, while this bill is improved from its original version,
it is no substitute for a comprehensive China policy that the
administration and the majority have failed to give us. I urge, and
strongly urge, a ``no'' vote on this legislation.
I reserve the balance of my time.
Mr. LEVIN. Mr. Speaker, it is my privilege to yield 1\1/2\ minutes to
the gentleman from Massachusetts (Mr. Neal), another active member of
our committee.
Mr. NEAL. I thank the gentleman.
Mr. Speaker, this legislation is about supporting American
manufacturing jobs, plain and simple. The Peterson Institute suggests
that this would increase American exports by $100 to $150 billion a
year. The Ways and Means Committee held three hearings on this issue
which confirmed that China is deliberately intervening in currency
markets to continue its unfair advantage over American manufacturers
and workers.
The committee reported out a bipartisan bill with important changes
to make it fully consistent with WTO rules. In short, this bill allows
currency manipulation to be considered in trade remedy cases. It is
consistent with a free market solution to enabling fair trade.
{time} 1620
Lawrence Lindsey, who was President George W. Bush's own economic
adviser, said, ``The Chinese clearly undervalue their exchange rate. It
is the Chinese Government, not markets and not Americans, who are
shaping how much is bought and from whom.'' This bill is not a solution
to all the challenges relating to U.S.-China trade, but it is a
significant and much-needed trade remedy tool to help American business
and workers compete.
New initiatives such as this are needed in response to negotiations
that
[[Page H7262]]
time and again have been stymied in both Democratic and Republican
administrations. This is a good step in the right direction.
Mr. BRADY of Texas. Mr. Speaker, I would like to yield 2 minutes to
the gentleman from Louisiana (Mr. Boustany), who has played a key role
in opening trade barriers for U.S. products.
Mr. BOUSTANY. Mr. Speaker, let me just be clear to start. China's
currency policy is wrong, and it is harmful for the U.S. and for China.
But it is one of many problems, a whole host of problems that we have
heard about: indigenous innovation, IPR protections, licensing and
standards, all of these nontariff barriers that we have heard so much
about.
So if we're going to look at how we approach this, we have to, A, be
consistent with our WTO and other international obligations; and, B,
whatever we do has to be effective. Those are the parameters that
Secretary Geithner himself laid out. I have questions as to whether
this approach will meet either of those. Yes, the bill on its face is
WTO compliant. But if we are to implement this connection between
countervailing duties and currency valuation, I believe that will be
subject to challenge. And I regret that we have not heard from the
Department of Commerce, U.S. Trade Rep, Treasury on their read on this.
In fact, the administration's not even made a statement with regard to
this bill as to the effectiveness or as to whether or not it is
consistent with our international obligations.
But to a broader point: If we're going to have leverage, we need
trade policy, and we do not have a trade policy. Ranking Member Camp
has already made the statement that we have had nothing beyond this in
the discussions about what are we going to do to really have leverage
and to move forward with a trade policy. I have heard from the
administration that we do need to move the South Korean free trade
agreement. Clearly we need to do that. We need a bilateral investment
treaty with China and with other countries. We have had no movement on
that.
Finally, I just think it's unacceptable that this administration did
not send a representative to the ASEAN conference in Asia recently. We
are not even showing up on the playing field. How can the U.S. be truly
credible if we're not actively engaged in a trade policy that makes
sense? U.S. credibility is on the line. We have to prove that we keep
our commitments.
Passing this bill is going to do nothing to solve our trade imbalance
with China. It is not the kind of tool, I believe, that we need. We
need to move forward in multilateral negotiations in a vigorous way and
enlist other allies who also have the same concerns that we do.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. BRADY of Texas. I yield the gentleman 1 additional minute.
Mr. BOUSTANY. We are starting to see the makings of a currency war
out there, where others are devaluing their currencies at our expense.
That's why this needs to be addressed at a multilateral level. I feel
we can do this in a responsible way. So because of these concerns, I am
going to oppose this bill.
But I do want to thank you, Chairman Levin, for working back from
what was originally a very bad bill to something that is improved. I
think we can do better. I can only wish that we were able to work
further on this to where we could have a truly strong bipartisan
agreement to approaching our very complicated and important commercial
and economic relationship with China.
Mr. LEVIN. I now yield 1\1/2\ minutes to the gentleman from
California (Mr. Becerra), another very distinguished member of our
committee.
Mr. BECERRA. Mr. Speaker, we can talk or we can act. International
trade is a high-stakes, cutthroat business. And every time we simply
talk, the other side acts. And every time they act, an American loses a
job. It's time for us to do what American workers for the last several
years have been asking us to do, and that is to take action against
what we know are unfair trade practices going on which cause us not
only to lose jobs but to lose American businesses that can't continue
to sustain themselves here and move abroad.
We know that the Chinese have been playing with their currency.
Everyone knows that the Chinese have been playing with their currency.
The Chinese know it. You know what? They are going to do everything
they can for their workers. They are going to do everything they can
for their businesses. You can't beat them for that. But please, let's
not let them beat us at what we can do well. And that's why it's time
to do this legislation.
Some credible estimates say that if we were to act on China's
currency manipulation, we could return 1 million American jobs to this
country, that we could reduce our $250 billion trade deficit by $100
billion with China. It is time for us to take action because the
Chinese are certainly taking action. We can either take bold steps, as
the American public has asked us, or we can take baby steps.
It's time for us to recognize that Americans are doing the best they
can to produce American products so we can sell them, not just here but
abroad. But if we allow someone to manipulate their currency by 25 to
40 percent, making their products look cheap here and making our
products look expensive abroad, then guess what? Shame on us, because
the American public is working very hard. It's time to pass this
legislation. It's time to take bold steps, not to take baby steps.
Mr. BRADY of Texas. At this time I yield 3 minutes to the gentleman
from Pennsylvania (Mr. Tim Murphy).
Mr. TIM MURPHY of Pennsylvania. I thank the gentleman for yielding.
And I thank my colleague Tim Ryan, who is the Democrat lead in this,
and I am the Republican lead on this. We know this is an important
bill.
You know, the perfect is the enemy of the necessary. We are arguing
about trade policies, what the WTO might think, what China might think,
what negotiations might happen while the American people are out there
saying, What are you doing about our jobs? China has been involved in a
number of things, such as steel dumping and dumping products here, and
setting these unfair currency practices which lead to up to a 40
percent discount. And while American companies see their factories
close and American workers get their pink slips, they wonder if
Washington gets it. Well, we do, and today is our chance to make good
on that.
There was a time when ``Made in the USA'' was a standard for the
world. It was a matter of fact that you owned the best. We earned that
esteem. And now we are about to lose our position as a global leader
when next year China overtakes us as the biggest manufacturer in the
world. You know, the trouble is that China has never really accepted
the basic rules of fair trade, and that's what we're standing for in
this bill, fair trade.
Former Bush administration Commerce Secretary Carlos Gutierrez said
that China's currency valuation does not yet adequately respond to
market forces. Treasury Secretary Tim Geithner said similar things,
believing that China is manipulating its currency. President Obama said
the same thing and said, We need a two-way street. But unfortunately,
when President Obama goes to talk to the Chinese, they push him back in
a corner because we've got $800 billion in debt to them, and they
continue to stall and stall.
Now I don't care who is in the White House, Republican, Democrat,
whoever. But I don't want another country saying to my President that
we are not going to talk to you about these things and somehow make it
sound like it is the United States' fault. This is an issue that
Republicans and Democrats alike are backing, and action delayed is
action denied. Only when our government starts pursuing policies that
cultivate rather than stifle American manufacturing and holds China and
other trading partners fully accountable for cheating on trade will we
begin to revitalize that manufacturing sector which we have lost ground
on.
If we unleash our factories and workers from the constraints of an
overly burdensome taxation and regulatory requirements, giving them the
tools they need to ensure that all countries play fair and by the
rules, the American manufacturer will win in the global marketplace
every time. With its dedicated workforce and demonstrated ingenuity,
American manufacturing has a chance not just to repair our economy, not
just lead us out of debt
[[Page H7263]]
and deficit, but to create hundreds of thousands of new, well-paying,
high-quality jobs.
We in Congress must do everything we can to support American
manufacturing in this goal and not stand in their way and not quietly
wring our hands and worry. We can start by passing the Currency Reform
for Fair Trade Act tomorrow, because in matters of economic and job
diplomacy, we can speak softly, but it sure is nice to carry a big
stick.
{time} 1630
Mr. LEVIN. I yield 1\1/2\ minutes to the distinguished gentleman from
California (Mr. Thompson), another member of our committee.
Mr. THOMPSON of California. Mr. Speaker and Members, I rise in
support of this legislation in part because it will help level the
playing field for America's renewable energy manufacturers. China has
time and again turned to unfair trade practice to promote their
manufacturers, and it is time we put a stop to that.
For example, solar panel technology was developed in America. Yet in
2008, China became the largest producer of solar panels in the world.
Right now it is cheaper to purchase Chinese-made solar panels here in
the United States because of China's manipulated currency. This is
unacceptable.
In my district our solar manufacturers compete on a global scale, but
they are at a huge disadvantage because of China's current policy.
The solar and renewable energy sector creates tens of thousands of
jobs, generating more jobs per megawatt of capacity than any other
energy technology.
Further, petroleum currently accounts for half of our total trade
deficit. By investing in and supporting our renewable energy
manufacturers, we can help close our trade deficit and stop giving
monies to countries who, in about 40 percent of the cases, are not our
friends.
It is time to support American jobs, American renewable energy
manufacturers, and, again, bring those jobs home. I urge my colleagues
to vote in favor of H.R. 2378.
Mr. BRADY of Texas. Mr. Speaker, I reserve the balance of my time.
Mr. LEVIN. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
Oregon (Mr. Blumenauer), another very, very distinguished member of our
Ways and Means Committee.
Mr. BLUMENAUER. I appreciate the gentleman's courtesy, and I
appreciate his leadership in working to have a piece of legislation
here that can be brought forward in a bipartisan fashion, listening to
the concerns that were expressed repeatedly to our committee.
I come from an area of the country that is intensely trade dependent.
Some of our iconic brands, Nike, Harry and David, Columbia Sportswear,
would not exist without strong international partnerships.
Oregon's largest private employer, Intel, is a product of the
international market for high-tech products. This makes a difference to
people in my community. When we find, as the International Monetary
Fund has found, the currency of the Chinese is significantly
undervalued, it makes the United States exports more expensive in China
and Chinese imports cheap in the United States and third country
markets.
My support for trade is contingent upon our making sure that we are
using the tools in an aggressive fashion. We should be using all of the
tools in our national trade tool box, the WTO, our bilateral
agreements, shared agreements, forums that the United States and China
are party to, U.S. domestic law, all of these to make sure that we are
ensuring this level playing field that people are talking about here.
If, as has been estimated, China's currency policy could reduce our
gross domestic product by over a percentage point when we are trying
desperately to jump-start the economy, this is precisely the policy we
should do moving forward.
Mr. Speaker, I appreciate having an opportunity to vote on this
today. I think this sends a strong signal that we want our
international trade regime to work, that we are not just mindlessly
entering into these agreements, but we are going to make sure that they
are enforced. This an important step.
Mr. BRADY of Texas. Mr. Speaker, I reserve the balance of my time.
Mr. LEVIN. I yield 1\1/2\ minutes to the gentlewoman from California
(Ms. Linda T. Sanchez), another distinguished member of our committee.
Ms. LINDA T. SANCHEZ of California. I thank Chairman Levin and
Ranking Member Camp and Representatives Ryan and Murphy for their
leadership on this important bill, which I strongly support.
Mr. Speaker, this bill is about protecting one thing, the American
economy. We must give American businesses a fair opportunity to sell
their goods abroad and challenge underpriced Chinese imports.
This bill does that. It gives us stronger tools to address currency
manipulation and protect American businesses. We can compete and win
against any nation in the world if we're all playing by the same rules.
China isn't.
Opponents say that this bill will start a trade war. I say we are
already in a trade war and China is using cannons, and we are standing
here shooting BB pellets.
Some say ``Let's wait.'' I say we have waited long enough.
When China joined the World Trade Organization in 2001, promises were
made. We have held up our end of the bargain. China has not.
It has manipulated its currency, condoned intellectual property
theft, and looked the other way while its businesses advertise schemes
to avoid paying us the duties that we are owed.
For nearly 10 years, the prior administration failed to address the
currency problem. Meanwhile, unfair Chinese imports caused small
businesses across the country to close their doors, including one in my
own district, Michels Furniture Store in Lynwood, California.
For nearly 10 years, our go-slow approach allowed China's job-killing
mercantilist currency policy to flourish. The time for waiting is over.
Given the unemployment rate in this country and the economic pain
that families feel in my district, shame on us if we fail to support
this bill.
Mr. BRADY of Texas. Mr. Speaker, I yield 2 minutes to the
distinguished gentleman from Michigan (Mr. Rogers).
Mr. ROGERS of Michigan. Mr. Speaker, today's debate has been a decade
in the making. While this Congress and administrations of both parties
fiddled, American manufacturing burned.
Michigan workers make an average of $12,000 a year less than they did
just a decade ago. Our trade deficit has skyrocketed, with
manufacturing goods deficit up 3,000 percent. It is no accident and it
is no coincidence. Chinese currency manipulation is the driving force
behind this destruction.
Chinese currency is at least 25 percent below where it should be,
making their goods cheap and destroying our manufacturing base.
In Michigan alone, Chinese currency manipulation has destroyed some
68,000 jobs in Michigan. In my district, some 4,500 jobs are gone
because this Congress and both the Bush and the Obama administrations
have refused to do anything but talk on Chinese currency manipulation.
Today's vote is a tough, first step toward fair trade with China.
Fair trade and the livelihood of Michigan workers finally lets them
compete on a level playing field with the start and the passage of this
bill.
Mr. LEVIN. Mr. Speaker, I yield 1 minute to the gentlewoman from New
York (Ms. Slaughter), the very distinguished chair of the Rules
Committee.
Ms. SLAUGHTER. I am going to forego the niceties of congressional
conversation this afternoon because I have only got a minute to tell
you what I really think. There are times when the timidity of the
Congress of the United States absolutely overwhelms me into anger.
We have sat by in this country since the Second World War was over,
watching American jobs go to rebuild the economies of Germany, Japan
and Korea, one after the other. We have gone way too far. We have
jeopardized our own well-being.
If we believe that we can be a superpower, the superpower, and not
manufacture anything, I think we are sorely mistaken. When we are
dependent on other countries for all the goods that we need, not only
domestically but
[[Page H7264]]
militarily, I think we are in a sorry shape.
Now, our trade policies that we have had have been awful, and it is
bipartisanly awful. But I will tell you right now that as far as I am
concerned, and I hope a lot of my colleagues agree with me, until we
get reciprocity, until every trade agreement that we pass says that
that country has to open its borders completely to trade from the
United States of America, we don't have anything.
We are way late on this. We are 20 years too late to be doing this.
We are right at the brink right now of financial disaster in this
country. Those jobs that we have lost are not coming back. We have got
to be rebuilding a new economy. We can't do it if China is going to do
it all first and get there and dump on us and undercut.
So not only pass this bill today, but demand stronger policies in
this country to save us for our next generation.
Mr. BRADY of Texas. Mr. Speaker, I yield 3 minutes to the gentleman
from Texas (Mr. Hensarling), who is focused on jobs, spending, and
getting this economy back on track.
Mr. HENSARLING. I thank the gentleman for yielding.
Mr. Speaker, as I look at the available evidence, I believe that the
preponderance of the evidence does show that China is manipulating its
currency. So I don't question the problem; I question the remedy. And I
question whether or not punishing American consumers is the right
remedy to apply to this situation. I believe that, ultimately, if this
legislation is enacted, that is what will happen.
We know already--we don't know what the estimates are, 5 to maybe 30
percent--that the renminbi may be overvalued. And China should let
their currency float.
{time} 1640
It is wrong what they're doing. They are hurting their own people by
doing what they're doing.
But in addition, Mr. Speaker, one thing I do know they are doing is
they are subsidizing goods to the American people at a time when many
family budgets are being strained. The available evidence shows that if
this was passed, if actually the renminbi was revalued, that prices for
many of these Chinese goods may go up 10 percent. A pair of shoes that
a mother needs for her child to go to school, maybe it is a pair of
glasses, maybe it is toys at Christmas, all become more expensive.
So to some extent there is a question: Should we pass a law, pick
winners and losers between manufacturers and consumers? Is that
something we should be doing? I am not sure that it is.
In addition, Mr. Speaker, we all know our history. We know that
presently we are still mired. Whether or not some Bureau economist
tells us we are out of a recession, we know that people in our
districts continue to suffer through probably the greatest economic
crisis we have seen since the Great Depression. One of the most
exacerbating factors happened to be the Smoot-Hawley tariff. I fear a
trade war.
Now, some say we are already having a trade war. Well, by historic
standards, we are probably having a trade skirmish. But we know that
already the administration last year elected to impose tariffs on
Chinese tires. And, guess what? They imposed tariffs on our poultry,
one of the few areas where we actually had a favorable balance of
trade, and so import tariffs up to 105 percent on U.S. exports of
poultry. So any type of jobs that may be gained in manufacturing just
might be lost in agriculture or some other area.
I am not convinced that the proponents of this bill have made the
case that, on net, this would even create more jobs in America. It
certainly would create more in one sector than another. But, again,
precipitating a trade war at a time when we are in tough economic
times, making it more difficult for consumers to afford the items they
need to provide for their families, I think is unwise public policy. So
I would urge defeat of this legislation.
Mr. LEVIN. I yield myself 10 seconds.
To the gentleman who just spoke, without a job, one can't buy goods
at any price. This bill is about jobs.
I now yield 1 minute to the gentleman from Ohio (Mr. Boccieri).
Mr. BOCCIERI. Mr. Speaker, the American people are watching. While we
may wear different jerseys, we are supposed to be playing for America,
and this vote today is about whether we are going to stand up and fight
for Americans.
Just last week, the Chinese Government ordered all our domestic
manufacturers who are building cars in China to turn over all their
battery technology. Ohio, who has 25 percent of her economy based on
the automotive industry, cannot afford to stand on the sidelines as
countries like China refuse to play by the rules.
Critics believe that this legislation could start a trade war.
America is already in a trade war, and the question is whether the U.S.
Government is going to show up for the fight. And forcing the agreed-
upon trade rules is not protectionist. In fact, the Chinese practices
like currency manipulation and illegal subsidies are protectionist.
In 2005 Ohio lost more than 183,000 manufacturing jobs because of bad
trade deals. I say that you can't afford to buy tennis shoes if you
don't have a job. And that is what this bill is about.
In the past 2 years alone, workers from nine local companies in my
district received trade adjustment assistance as a result of bad trade
deals.
We respect the Chinese culture, their people, and their workers, but
we are playing for America. We have got to build it; we have got to
assemble it, and we have got to manufacture it here in our country. We
can't be the movers of wealth; we have to be the producers of wealth,
and it starts with this vote today.
Mr. BRADY of Texas. Mr. Speaker, I yield 2 minutes to the
distinguished gentleman from California (Mr. Rohrabacher).
Mr. ROHRABACHER. I rise in support of the resolution.
I think that the Chinese clique that dominates that country has not
only mistreated its own people, because they are the worst kind of
tyrants one can imagine, but they have also been treating the American
people in a malicious way as well.
The fact is that we have adopted policies that are very positive
toward the Chinese and the Chinese Government that have been to the
detriment of the people of the United States. We have permitted a one-
way free trade policy. We have permitted a lack of access to their
markets while they have total access to our markets. We have put up
with the wholesale theft of American technology. And, yes, we have put
up with the fact that they have manipulated their currency in a way
that ensures the flow of wealth into their society as opposed to an
equal relationship that would benefit both countries.
What we have to do is decide are we going to permit the clique that
runs China to continue to do great damage to the people of the United
States of America, or are we going to provide some sort of action that
we can take if they are manipulating the currency in a way that shifts
the wealth from our society and the jobs from our society and
transports them to China?
And let me note this. In a dictatorship like China, we are not
talking about wealth that is raising the standard of living of their
people. We are talking about wealth that, in the end, is manipulated
and controlled by a clique of gangsters who are the worst human rights
abusers in the world. And what are they doing with this profit that
they make from this unfair trade relationship and manipulation of
currency? They are building a military, a modern military based on
technology that they have stolen from us and an unfair trade
relationship that we have acquiesced to over the years.
It is about time we have legislation that will at least prevent them
from manipulating the currency and give us an alternative action that
we can take to try to prevent the manipulation of currency on the part
of the Chinese. So I rise in support of this resolution.
Mr. LEVIN. Mr. Speaker, I now yield 1\1/2\ minutes to the gentleman
from North Carolina (Mr. Etheridge), a member of our Ways and Means
Committee.
Mr. ETHERIDGE. I thank the gentleman for yielding.
Mr. Speaker, I rise in support of fair trade and making sure other
countries play by the rules and in support of H.R. 2378, the Currency
Reform for Fair Trade Act.
Just this week, China announced tariffs as high as 105.4 percent on
U.S.
[[Page H7265]]
poultry because of a trumped-up dumping charge. But the real trade
distortion in the U.S.-China relationship is currency manipulation--a
huge subsidy to their manufacturers and a hidden tariff on U.S. goods.
China's currency manipulation allows them to sell the world cheaper
goods, costing us jobs and economic growth.
This bill would give our trade negotiators the tools they need to
investigate this manipulation and take action, if appropriate. It would
restore balance to our trade relationship.
North Carolina's producers are second to none, and given a level
playing field, our workers can compete with anybody. But how are they
supposed to compete with a country that manipulates its currency? I say
it is not fair.
Mr. Speaker, we should pass this bill and send a clear message to
China that it is time to play by the rules. I call on my colleagues to
stand up for our exporters, our producers, and the people of America,
and join me in supporting American industry and H.R. 2378.
Earlier this week we saw another example of how China refuses to play
by the rules for international trade. On Monday, China announced that
it would impose steep tariffs on our poultry producers. Because of this
decision, some U.S. producers will face tariffs as high as 105.4
percent. China claims that this is in response to ``dumping'' in its
market, but we all know that this is actually retaliation for U.S.
tariffs on tires. Once again, the Chinese government has shown that it
will take extraordinary--and illegal--steps to make sure they enjoy
unfair advantages in their trade relationship with the United States.
Nowhere is this unjustifiable trade distortion more evident than in
China's intervention in the value of its currency. This currency
manipulation amounts to a subsidy: It allows China to sell goods at a
cheaper price here in this country, while simultaneously making our
exports more expensive. As a consequence, the United States now has a
large trade deficit with China; a trade deficit that is now slowing the
economic recovery. For the sake of our economy and our country, it is
vital that we address this issue.
H.R. 2378 gives the U.S. Commerce Department the tools to examine
this matter. It does not force any conclusion be reached, but rather
all the facts be taken into account when making a decision as to
whether China's currency manipulation constitutes an illegal subsidy.
If Commerce finds that China is violating trade law, this bill makes
sure the United States takes action to protect our industry, our
exporters and our economy. Nothing could be more important.
Trade is good for America, but only if it is fair. My state of North
Carolina produces everything from pharmaceuticals, industrial goods
such as jet engine parts, to tobacco and textiles. Our farms produce
top quality poultry and pork. North Carolina's products are second to
none, and, given a level playing field, our workers can compete with
anybody. But how are they supposed to compete with a country that
manipulates its currency? That's not fair.
I know that some of my friends on the other side of the aisle will
object to this bill. Many are fearful that China will react to this
legislation by imposing retaliatory tariffs that further hurt our
exporters. But China already arbitrarily slaps tariffs on our goods
regardless of what we do, as we saw earlier this week. This
legislation, on the other hand, complies with WTO laws and precedents,
and any retaliation by China because of this bill would be unlawful.
As our trade deficit threatens to sap our economic recovery, we
should pass this bill and send a clear message to China that it is time
to play by the rules. Some economists estimate that a significant
appreciation of the Chinese currency will create 600,000 to 1,200,000
jobs. When many people throughout the country are struggling to find
employment, it is the right time to pass this bill.
Mr. Speaker, this bill will ensure our trading partners play by the
rules. I call on my colleagues to stand up for our exporters and
producers, and join me in supporting American industry and H.R. 2378.
Mr. LEVIN. Mr. Speaker, I now yield 1 minute to the distinguished
gentleman from Indiana (Mr. Visclosky).
Mr. VISCLOSKY. I thank the gentleman for yielding, and I want to
thank Chairman Levin and Mr. Camp for bringing this bill to the floor.
I want to thank Mr. Ryan and Mr. Murphy for their very, very good work
on this bill.
This is a jobs issue, and there should be no doubt in anyone's mind
that that is what we are talking about today.
In 1990, in the State of Indiana, 226,000 more people worked in
manufacturing than in government. This year, 7,000 more people work in
manufacturing than government, because 165,000 manufacturing employees
lost their jobs. That is 165,000 families in the State of Indiana alone
that lost good-paying manufacturing jobs. One of the causes is the
currency manipulation by the Chinese Government.
{time} 1650
We were told by the last administration if we just dialogue with the
Chinese, we would solve this problem. We are told by the current
administration, if we just dialogue with the Chinese, we will solve
this problem. We were told by the Chinese on May 18, 2007, if we just
dialogue on this problem, we will solve it.
The solution is on the floor today. I would ask my colleagues to
strongly support passage of H.R. 2378, and give this administration the
intestinal fortitude to stop dialoguing with the Chinese and to take
serious action on jobs.
I strongly support H.R. 2378, the Currency Reform for Fair Trade Act.
I am proud to have the opportunity to speak in support of this bill
that takes an important step in leveling the playing field for United
States manufacturers.
At the outset of my remarks, I would like to applaud the leadership
of the Ways and Means Committee, especially Chairman Levin and Ranking
Member Camp for bringing this legislation to the Floor. I would also
like to commend Representative Tim Ryan, the sponsor of the
legislation, and Representative Tim Murphy, the Vice Chairman of the
Congressional Steel Caucus, for their tireless efforts advocating for
this much-needed bill.
As the Chairman of the Congressional Steel Caucus, I would like to
focus my remarks on the steel industry. In the world of steel, China is
of paramount concern. In 2009, China produced 47 percent of the world's
total output of steel, which is 567.8 million tons. This is more than
double the amount that China produced in 2003. By comparison, last year
the United States produced approximately 60 million tons of steel,
compared with approximately 100 million tons in 2003. While multiple
factors contributed to China's unprecedented increase in production,
paramount among them is China's currency manipulation. The undervalued
Yuan is perpetuating a destructive trade imbalance and costing American
jobs.
Congress must ensure that the U.S. remains a competitive place for
manufacturing investment. This requires the U.S. to reverse the
unsustainable imbalance that has allowed other nations to adopt
policies supporting excessive exports of manufactured goods to the
U.S., while we export debt and manufacturing jobs. And we must take
action now, as evidenced by a recent report by the Economic Policy
Institute, which estimates that the rising trade deficit with China
will cost the U.S. over one-half of a million jobs in 2010.
I believe that the passage of H.R. 2378 represents a turning point in
the battle to combat unfair Chinese trading practices. And I hope that
its passage finally gives the Administration the intestinal fortitude
to stop ``dialoguing'' with Beijing and start enforcing our trade laws.
Mr. Speaker, I again want to thank Representatives Ryan and Murphy
and the Committee for bringing this important legislation to the Floor,
and I urge my colleagues to support the measure.
Mr. BRADY of Texas. Mr. Speaker, I reserve the balance of my time.
Mr. LEVIN. Mr. Speaker, I yield 1 minute to the gentleman from Oregon
(Mr. DeFazio).
Mr. DeFAZIO. Mr. Speaker, I was a bit surprised to hear the gentleman
from Texas and a few others on the Republican side find an excuse to
oppose this legislation, but, then again, they always find an excuse to
side with their international corporate benefactors.
He feigned, ``Oh, my god, the American people won't be able to afford
shoes for their kids next fall because we won't have those cheap
Chinese imports shutting down American factories.''
Now, what the Americans need are jobs. We don't need jobs in China;
we need them here. And with an unfairly priced currency, we are losing
more and more manufacturing.
When the Republicans controlled everything from 1994 to 2006, or the
Congress and the presidency for a good part of that time, our trade
deficit with China went up 806 percent, and they did nothing. But they
can find little problems here and there with this legislation.
They are worried about a trade war. We are at war. We are having a
trade war with China. They are supporting capitulation, and we are
finally starting to fight back from this side of the aisle.
No, no excuses. Plain and simple: Are you with the American people
and fair
[[Page H7266]]
trade, or are you with the Chinese and the big international
corporations and their excuse for free trade, which is manipulated
currencies, trade barriers, and taking our jobs away from our workers.
Plain and similar: Where do you stand?
Mr. BRADY of Texas. Mr. Speaker, I yield myself 15 seconds.
I would make the point that the Chinese currency appreciated 20
percent during President Bush's administration. It had no impact on the
trade deficit. It has only appreciated 5 percent under the current
administration, with no impact on the trade deficit.
I reserve my time.
Mr. LEVIN. Mr. Speaker, it is now my special pleasure to yield 2
minutes to the gentleman who is an original cosponsor of this important
legislation, the gentleman from Ohio (Mr. Ryan).
Mr. RYAN of Ohio. Let me thank the chairman for his good work. Let me
thank Speaker Pelosi for her giving us this opportunity to bring this
bill to the floor, and Leader Hoyer, who was very instrumental in our
Make It In America project, of which this is a major component.
In the late 1970s, the top 1 percent of the people in our country
controlled about 9 percent of real income, and in 2007, the top 1
percent controlled about 23.5 percent of real income. If you go back
and see the amount of time families worked in the late 1970s compared
to today, the average family works about 12 weeks more a year than they
did back then.
So the average family is making less, working longer, sometimes two
or three jobs just to make ends meet, and part of the problem has been
this erosion of the manufacturing base. And what we are talking about
with currency manipulation is the Chinese Government artificially
subsidizing every single product that lands on our shores here in the
United States. So, yes, it may be cheap, because it is being subsidized
by their government, but it is putting American workers and American
manufacturers out of business.
If we are going to resuscitate this economy, we have got to focus as
a nation on making things in America again. And if you look at the list
of the supporters of this bill, tool and die manufacturers, corn
growers, the supply chain for all of our manufacturing that happens in
the United States, they are all supporting this bill, along with all of
the workers groups, all of the unions.
This is something we can all agree on. It will stimulate our economy
and not add one dime to the deficit, and that is what this is about.
For every manufacturing job, you get five or six or seven spinoff
jobs. Manufacturing jobs pay more. There are more patents, more
innovation, more research and development.
This is about taking our country back. You wonder why people are
anxious out there? They have been working longer, working more, and
getting paid less. I would be anxious too. I would be upset. That is
what we are feeling in the country.
I think this bill is an opportunity for us to reinvest back in the
United States, put people back to work, and have good, middle class
jobs here in the United States.
Mr. BRADY of Texas. I reserve the balance of my time.
Mr. LEVIN. Mr. Speaker, how much is there on both sides?
The SPEAKER pro tempore. The gentleman from Michigan has 11 minutes
remaining. The gentleman from Texas has 10\3/4\ minutes remaining.
Mr. LEVIN. It is now my pleasure to yield 1 minute to the gentleman
from Maine (Mr. Michaud), an active participant in discussions of trade
issues.
Mr. MICHAUD. Thank you very much, Mr. Chairman, for yielding, and I
also thank you for your leadership on this issue of bringing this bill
before the House.
Mr. Speaker, I rise today to express my strong support for H.R. 2378.
This issue is simple: China's currency manipulation is illegal, and it
costs Maine jobs. Just ask the Sappi Fine paper mill workers in
Westbrook and Skowhegan, or those at the NewPage mill in Rumford. They
have seen their coworkers get laid off and were certified for Trade
Adjustment Assistance because of cheap Chinese paper imports.
In fact, over 9,000 Mainers in all sectors have lost their jobs
because of our trade deficit with China, which is directly related to
their currency manipulation. Companies like NewPage and Sappi Fine
can't compete when China doesn't play by the rules.
This bill will help us hold China's feet to the fire for their unfair
trade practices. It will make sure American companies are competing on
a level playing field. And it will save American jobs.
I urge my colleagues to vote for this critical bill.
Mr. BRADY of Texas. I reserve the balance of my time.
Mr. LEVIN. Mr. Speaker, it is now my pleasure to yield 2 minutes to
the very distinguished gentleman from New York (Mr. Rangel).
(Mr. RANGEL asked and was given permission to revise and extend his
remarks.)
Mr. RANGEL. Let me congratulate the chairman and the ranking member
of Ways and Means for coming together to have this civil type of
discourse, having our staffs work together, agreeing on some things,
disagreeing on others, but showing that bipartisanship, while it might
be in intensive care, at least on the Ways and Means Committee it is
not dead.
Mr. Speaker, we do recognize that there is a split among business
people as to whether or not we should go forward with this bill that
would point out to China, as so many developing countries would like
to, but they certainly don't have our leverage, that it is time that
they be fair in terms of international trade.
Those people who buy from China and enjoy the lower prices, I can
understand why they would not support the equity that we are seeking in
international affairs, as well as in the WTO.
But for those Americans who take a deep-seated pride when they see
``made in the USA,'' when we know we can make it in the USA with jobs,
then we don't get excited about the number of jobs that occur in China,
but believe that it is patriotic, and if it hasn't reached that level,
then certainly it is in the best interests of the United States of
America, to say that we supported you, we supported you in getting into
the World Trade Organization, with that comes some obligation. And if
the President cannot succeed in persuading them, as he said, there are
other means which we can use as a nation to encourage them to do the
right thing.
So, Mr. Speaker, I hope that the chairman here and the ranking member
could find some other things before we go home that we can come
together on. But until that happens, congratulations to both of you.
Mr. BRADY of Texas. Mr. Speaker, I reserve the balance of my time.
Mr. LEVIN. Mr. Speaker, I now yield 1\1/2\ minutes to the
distinguished gentlewoman from Ohio (Ms. Sutton).
{time} 1700
Ms. SUTTON. Thank you, Chairman Levin, for your leadership on this
issue.
Abusive trade practices by China have cost American small businesses
opportunities and American workers jobs. We've heard the numbers--2.4
million jobs lost across the country, 92,000 jobs lost in Ohio, and
5,700 jobs have been lost in my congressional district due to China's
deliberate and abusive trade policies--policies like their blatant
currency manipulation that violates their obligations to international
trading.
Today, we say we've had enough. Today, we stand with American workers
and American small businesses. We send a clear message that American
workers and businesses will compete with Chinese workers and businesses
but they should not have to compete against a manipulated currency.
China's currency manipulation makes their goods artificially cheaper,
costing our workers jobs and our businesses opportunities. Working
families around the country see and feel the results of China's
misaligned currency. We must stand against it. They see plants closing.
They see friends and loved ones losing their jobs. And today, Mr.
Speaker, they are seeing us stand up for American manufacturing and
American workers and demand a level playing field and an end to China's
currency manipulation.
Mr. BRADY of Texas. Mr. Speaker, I reserve the balance of my time.
Mr. LEVIN. Mr. Speaker, it is now my privilege, a deep privilege, to
yield
[[Page H7267]]
1 minute to our distinguished Speaker, the gentlewoman from California
(Ms. Pelosi).
Ms. PELOSI. I thank our distinguished chairman of the Ways and Means
Committee for the recognition and for his yielding time. I thank him
for his leadership in bringing this legislation to the floor. I thank
Mr. Murphy of Pennsylvania and Mr. Ryan of Ohio for their leadership in
this important legislation.
Mr. Speaker, for so many years we have watched the China-U.S. trade
deficit grow and grow and grow. And today we are finally doing
something about it by recognizing that China's manipulation of the
currency represents a subsidy for Chinese exports coming to the United
States and elsewhere.
Many of us have been working on this issue for decades. Twenty years
ago, when the issue of China trade was before the floor of the House,
the trade deficit was $5 billion a year. The U.S.-China trade deficit
was $5 billion a year. We thought that that gave us tremendous leverage
for them to stop violating our intellectual property, to give us market
access, to stop nontariff barriers to our products going into China,
and the rest. We had other issues with China's proliferation of weapons
of mass destruction to Pakistan, with the actions taken in Tiananmen
Square, and human rights in China and Tibet. But strictly on the
subject of trade, the imbalance was $5 billion, which seems like an
enormous amount of money.
We tried through legislation, unsuccessfully, on the floor under both
Democratic and Republican Presidents--this is not a partisan thing--and
because of the opposition of the administration, we were not able to
pass any legislation that said, Halt. We understand the U.S.-China
relationship is an important one in every way--culturally, politically,
diplomatically, economically, and commercially--but we need to play by
the rules.
When China came into the WTO, it was projected that they would play
by the rules. But here we are today, and remember, I said the trade
deficit was $5 billion a year 20 years ago when we were having this
debate then. It is now $5 billion a week. A week. One way that we can
address that is to address the issue of China's manipulation of the
currency, which, as I mentioned, is a subsidy for their exports.
We believe that passing this legislation here today will give the
President leverage in his conversations with the Chinese about how
seriously and closely the American people are watching this situation.
As part of our Make It In America agenda to stop the erosion of our
manufacturing, industrial, and technological base, we have to stop
that. It's an economic issue and it's a national security issue that we
have the manufacturing capacity to protect the American people in every
way.
So this is about America's workers. It's about making it in America
so that our people can make it in America for their families, for their
communities, for our country, for our economy. Especially now, when
we're talking about all the new green technologies and the rest, which
are part of the green, clean energy jobs for the future, and we see
what is happening in the trade relationship with China on that score,
it is absolutely essential, as we go farther into that future, that we
do not have unfair subsidies of Chinese exports into the United States
in the important competitive arena of innovation and new green
technology.
So with this bipartisan legislation, and, again, I commend
Representative Tim Murphy and Representative Tim Ryan, we make it clear
that if China wants a strong trading relationship with the United
States, it must play by the rules. We owe that to American workers. It
is our hope that passing this legislation, again, will give the Obama
administration and future administrations greater leverage in its
bilateral and multilateral negotiations with the Chinese Government. We
do this because 1 million American jobs could be created if the Chinese
Government took its thumb off the scale and allowed its currency to
respond to market forces.
The bipartisan Ryan-Murphy Currency Reform for Fair Trade Act marks a
positive step in the direction of fairness for our workers,
opportunities for our manufacturers, and growth for our economic
prosperity. I urge our colleagues to vote ``aye.''
Mr. BRADY of Texas. Mr. Speaker, I yield 2 minutes to the gentleman
from Arizona (Mr. Flake), who is, again, focused on jobs and getting
this economy back on track, as well as limiting the size of these
dangerous debts and deficits.
Mr. FLAKE. I thank the gentleman for yielding.
I rise in opposition to this bill. There's no denying that there are
issues related to Chinese currency valuation. Unfortunately, the
passage of this bill today will do little to address those concerns.
Instead, approval of this bill will likely only result in retaliatory
actions on the part of the Chinese.
A recent letter was penned to leaders of the House of Representatives
by a variety of business groups, including the Chamber of Commerce,
Business Roundtable, National Foreign Trade Council, and others. They
wrote: ``Unilateral legislation, which seeks to increase tariffs on
imports from China, is unlikely to incentivize China to move
expeditiously to modify its exchange policies. Rather, it would likely
have the opposite effect and could engender retaliation against U.S.
exports into the Chinese market, currently the fastest growing market
for U.S. exports.''
Courting retaliation with no direct benefit likely qualifies for what
you would call the very definition of counterproductive trade policy.
And it's unfortunate that, as has been said here today before, in 2
years this is about the only trade legislation that we've considered.
Certainly, very little to open up new markets. We have three pending
trade agreements that languish that should be approved, and yet this is
what we're doing. That's really sad.
Later today I think we're considering something like a Made in
America Flag Act or something to require that we not import any flags
made outside of the U.S. into the U.S. I don't know what's next. Maybe
requiring Americans to eat apple pie while they make flags. I don't
know. But we're into the crazy season here where we're simply pandering
instead of actually addressing what will open new markets and help
create jobs in the private sector.
I urge opposition to H.R. 2378.
Mr. LEVIN. I yield 1 minute to the distinguished gentleman and
colleague from Michigan (Mr. Kildee).
{time} 1710
Mr. KILDEE. I thank the gentleman for yielding.
Mr. Speaker, I rise today in strong support of H.R. 2378, the
Currency Reform for Fair Trade Act.
For years, China has unfairly pegged its currency to the U.S. dollar
at a fixed exchange rate. It is estimated that this undervalues Chinese
currency 20 to 40 percent, allowing them to offer significantly cheaper
products for export. American workers are playing by the rules, but
they are struggling to compete on the unfair playing field Chinese
currency manipulation has created.
Cheap exports from China have contributed to hundreds of thousands of
American job losses. In my hometown of Flint, Michigan, unemployment is
more than 25 percent. However, currency manipulation is not currently
considered when determining export subsidies to assist American
businesses. This has to change. We must stand up for our workers and
their livelihoods.
H.R. 2378 will make currency manipulation a factor when the Commerce
Department awards export subsidies. I have long advocated for fair
trade policies that protect American workers. This bill will go a long
way toward achieving that goal.
I urge passage of the Currency Reform for Fair Trade Act.
Mr. BRADY of Texas. I reserve the balance of my time.
Mr. LEVIN. I yield 15 seconds to the gentleman from Ohio (Mr. Ryan).
Mr. RYAN of Ohio. Mr. Speaker, I just want to respond to the
gentleman from Arizona. He talked about our exporting products to
China. This bill would actually increase the buying power of the
Chinese consumer because their yuan would be worth more money so they
would have more buying power to buy American exports.
So this snake oil that the Chamber of Commerce is trying to send
around and scare everybody not to vote for this
[[Page H7268]]
doesn't make any sense. The more your currency is worth, the more
you're going to be able to buy.
Mr. LEVIN. I now yield 1 minute to the gentleman from New Jersey (Mr.
Andrews).
(Mr. ANDREWS asked and was given permission to revise and extend his
remarks.)
Mr. ANDREWS. I thank the chairman for yielding.
My friend from Arizona said a few minutes ago, we're in the crazy
season. I think on this issue we've been in the crazy season for about
two decades. I think when we have a policy that says if the other side
doesn't follow the rules, you just ignore it, I think that's crazy. If
you have a policy that says if the Chinese manipulate their currency
and make it easy to fill the shelves at Wal-Mart but empty the pockets
of American workers and you ignore it, I think that's crazy.
So I think the process of going forward when the other side doesn't
play by the same rules that we do, that empties factories, empties
wallets and empties communities in this country, I think ignoring that
is crazy. And I am glad to see that this House on a bipartisan basis
for the first time in a long time is saying it's time to stand up for
American communities, American companies and American workers and vote
``yes'' on this legislation.
Mr. BRADY of Texas. Mr. Speaker, I continue to reserve.
Mr. LEVIN. It is now my special privilege to yield 1 minute to the
distinguished gentleman from Virginia (Mr. Perriello).
Mr. PERRIELLO. Thank you very much for your leadership on this issue.
This is a great day for American job creation, for the American
worker, and a very sad day for American politics.
This is simple. If we give the American people, the American worker
and American business a level playing field, they will still out-
compete the world. We can still make it, build it and grow it better in
America than anywhere else, if we give that fair playing field.
What could be simpler than going after China for manipulating its
currency and unfairly dumping its products and pushing out the much-
needed American manufacturing base that we must be rebuilding rather
than suffocating?
If ever there was something we should be able to come together on, it
should be standing with American workers instead of Chinese
corporations and Chinese rule-breaking. And yet here we have a debate
rather than unity.
Earlier today, we fought to extend health benefits to our heroes and
their families from 9/11. And while we cheered and saluted, many on the
other side of the aisle sat on their hands. Aren't these commonsense
things that the American people are begging us to come together and
focus on? Commonsense solutions. This is our chance--to fight for
American jobs, like the steelworkers in my district. Six thousand
manufacturing jobs lost to China in my district alone and 24,000 family
members of those who have lost their jobs.
For those who want to play games with this issue, it is long past
time to do what is right.
Mr. BRADY of Texas. Mr. Speaker, I yield myself 30 seconds.
I do think it is unfortunate to try to interject partisan politics
into a serious issue. There is already concern that after 4 years this
bill is now being rushed to the floor a few weeks ahead of the
election. I think at this point on an issue so serious, we ought to be
thoughtful, understanding there are Members on both sides of the aisle
that have come to different conclusions about this bill.
With that, I continue to reserve my time.
Mr. LEVIN. Mr. Speaker, how much time remains on either side?
The SPEAKER pro tempore. The gentleman from Michigan has 2\1/4\
minutes, and the gentleman from Texas has 8\1/4\ minutes.
Mr. LEVIN. I yield now 1 minute to the gentleman from Vermont (Mr.
Welch).
Mr. WELCH. I thank you, Mr. Chairman.
Mr. Speaker, the American middle class has been built on having jobs
that allow families to pay their bills, to send their kids to college,
to own a home, to save for their own retirement.
The American middle class has been under assault; their wages
declining, their jobs being outsourced and sent abroad. Our fundamental
responsibility is to give folks who want to work the opportunity to
work in jobs that are going to allow them to take care of their
families. And if we stand by idly when a competitor country manipulates
its currency to put our manufacturers, our workers, at a disadvantage,
we are complicit in that. And this is the bare minimum of what we can
do--give our workers, give our manufacturers, give our American middle
class an even shot at the American Dream.
This legislation is necessary, it's overdue, and it must be passed.
Mr. BRADY of Texas. Mr. Speaker, I continue to reserve.
General Leave
Mr. LEVIN. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days in which to revise and extend their remarks and
include extraneous material on H.R. 2378.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
Mr. LEVIN. Is the gentleman ready to close?
Mr. BRADY of Texas. I am, Mr. Chairman.
Mr. LEVIN. So am I.
Mr. BRADY of Texas. Mr. Speaker, I yield myself the balance of my
time.
This is an issue, I think, where good people can disagree. There is
unanimity in the desire for China to appreciate its currency. There are
differences of opinion about what impact that truly would have on our
complex relationship with China economically. And there have been a
number of issues raised throughout the hearings on this bill, and I do
appreciate, to Chairman Levin, taking into account the number of the
objections on the most, we think, troubling provisions that Ranking
Member Dave Camp from Michigan and others raised during those hearings.
I think some of those issues have been addressed in a very positive
way, but there are real concerns about how effective this will be, and
if it will truly compel China to change its currency regime or that it
will significantly change our trade deficit.
I would like to submit for the Record a letter sent by, I think,
almost 30 of our major job creators in America, groups that represent
many of our agriculture companies and workers, our technology sector,
our manufacturing and financial services sector, those who produce and
sell medical devices and services throughout the world, including
groups like the National Retail Federation; the broader job creators
like the U.S. Chamber of Commerce, the Business Roundtable and
companies that compete and succeed successfully selling U.S. products
in China.
This letter agrees with Chairman Levin and others that China needs a
yuan exchange rate response to trade flows and that China should move
rapidly toward that. But it says:
``We do not agree, however, that H.R. 2378 as reported can help
achieve that goal. To the contrary, we believe that passage of this
legislation is counterproductive not only to the goals related to
China's exchange rate that we all share but also to our Nation's
broader goals of addressing the many and growing challenges in the
U.S.-China economic relationship, including inadequate protection of
intellectual property, restrictions on market access, financial
services liberalization, export of commodities such as rare earths,
discriminatory indigenous innovation and other industrial policies.
Above all, this legislation will do more harm than good to job creation
and economic growth at a time when we need both dearly.''
The point of that, I think, is that there are a number of barriers to
selling U.S. products fairly and successfully in that growing Chinese
market. We all have the same goal. How we achieve it is where we
honestly differ.
{time} 1720
This group concludes this way:
``We share Congress' desire to have China act more quickly to adopt a
market-determined exchange rate, but the proposed unilateral measure is
not going to achieve that result. We urge you to oppose H.R. 2378 and,
instead, work with and vigorously call on the administration to develop
a robust bilateral and multilateral approach to
[[Page H7269]]
achieve tangible results, not only on China's exchange rate policies,
but also on other Chinese policies that are harming American
businesses, workers and farmers.''
I think that is the point, perhaps, of those of us who believe this
bill will not achieve what we hope.
While I urge opposition of this bill, there are those who believe
that, as we move forward, regardless of the outcome, we ought to,
Republicans and Democrats, join hands and insist on fair access to
Chinese markets, on a level playing field and on a growing trade
relationship that is balanced to increase Chinese consumption, as well
as to increase U.S. savings that will rebalance the trade relationship
for decades to come. We share those goals and look forward to working
with those in Congress who also share them.
September 28, 2010.
Hon. Nancy Pelosi,
Speaker, House of Representatives,
U.S. Capitol, Washington, DC.
Hon. Steny Hoyer,
Majority Leader, House of Representatives,
U.S. Capitol, Washington, DC.
Hon. John Boehner,
Republican Leader, House of Representatives,
U.S. Capitol, Washington, DC.
Dear Speaker Pelosi and Leaders Hoyer and Boehner: Like
Congress and the Administration, we agree that China needs a
yuan exchange rate that responds to trade flows and that
China should move rapidly towards a market-determined
exchange rate. In addition to continuing U.S. government
efforts, our organizations support strong, coordinated and
enhanced multilateral pressure, including at the early
October Finance Ministers' Meeting in Washington and
continuing at the November G20 Leaders' Meeting in Seoul, to
achieve concrete progress on China's currency and exchange
rate policies.
We do not agree, however, that H.R. 2378 as reported by the
Committee on Ways and Means can help achieve that goal. To
the contrary, we believe that passage of this legislation is
counterproductive not only to the goals related to China's
exchange rate that we all share, but also to our nation's
broader goals of addressing the many and growing challenges
in the U.S.-China economic relationship, including inadequate
protection of intellectual property, restrictions on market
access, financial services liberalization, export of
commodities such as rare earths, discriminatory indigenous
innovation and other industrial policies. Above all this
legislation will do more harm than good to job creation and
economic growth at a time when we need both dearly.
Unilateral legislation, which seeks to increase tariffs on
imports from China, is unlikely to incentivize China to move
expeditiously to modify its exchange policies. Rather, it
would likely have the opposite effect and could engender
retaliation against U.S. exports into the Chinese market,
currently the fastest-growing market for U.S. exports. Our
companies do not fear retaliation--if it were based on WTO-
consistent actions that would achieve the desired result,
with benefits outweighing the costs. But counterproductive
tariff legislation will not get us closer to the goal of a
market-driven exchange rate and will shift the focus away
from the core issue of China's currency and onto U.S.
unilateral action. Such an action would embolden PRC
retaliation and undermine U.S. government efforts to address
a growing number of discriminatory Chinese policies,
weakening our economy by harming American exports of
manufactured goods and farm products.
Despite efforts to make H.R. 2378 consistent with the rules
of the WTO, it is not clear that the legislation meets the
WTO's standards for the application of countervailing duties
(CVDs). The legislation would require the Commerce Department
to estimate what the ``true'' exchange rate is, a process
that will be highly subjective and potentially politicized.
Since application of CVDs to imports from China on the basis
of this legislation is of questionable WTO legality, China
would almost certainly challenge this action as violative of
U.S. WTO obligations, which would focus the world's attention
on the United States and WTO technicalities, and away from
China's exchange-rate policies.
We share Congress' desire to have China act more quickly to
adopt a market-determined exchange rate. But the proposed
unilateral measure is not going to achieve that result. We
urge you to oppose H.R. 2378 and instead work with and
vigorously call on the Administration to develop a robust
bilateral and multilateral approach to achieve tangible
results not only on China's exchange-rate policies, but also
on other Chinese policies that are harming American
businesses, workers and farmers.
Sincerely,
Advanced Medical Technology Association (AdvaMed);
American Chamber of Commerce in China; American Chamber
of Commerce in Shanghai; American Chamber of Commerce
in South China; American Apparel & Footwear Association
(AAFA); American Soybean Association; American Meat
Institute; Business Roundtable; Coalition of New
England Companies for Trade (CONECT); Coalition of
Service Industries; Consumer Electronics Association;
and Corn Refiners Association.
Distilled Spirits Council of the United States; Emergency
Committee for American Trade (ECAT); Fashion
Accessories Shippers Association (FASA); Financial
Services Forum; Financial Services Roundtable;
International Dairy Foods Association; Los Angeles
Customs Brokers and Freight Forwarders Association;
National Cattlemen's Beef Association; National Customs
Brokers and Forwarders Association of America (NCBFAA);
National Fisheries Institute; National Foreign Trade
Council; and National Retail Federation.
Pacific Coast Council of Customs Brokers and Freight
Forwarders (PCC); Retail Industry Leaders Association;
Securities Industry and Financial Markets Association;
Sporting Goods Manufacturers Association; Toy Industry
Association; Travel Goods Association (TGA); United
States Association of Importers of Textiles and Apparel
(USA-ITA); U.S. Chamber of Commerce; US-China Business
Council; U.S. Council for International Business; USA
Poultry & Egg Export Council; and Washington State
China Relations Council.
Mr. Speaker, I yield back the balance of my time.
Mr. LEVIN. I yield myself the balance of my time.
Mr. Speaker, international trade is here to stay. The question before
us today is whether we shape its course or simply let it roll--whether
there are rules of competition that allow us to compete or whether we
look the other way.
A 25-40 percent tilt against us is unacceptable. This bill says we
cannot and will not look the other way. We are going to act. I say the
more multilateral effort the better, but the lack of it should not
leave us without a remedy.
China's manipulation of its currency is a major unilateral act, and
we need to act. The President of our country said to the Chinese
Premier, ``Make your currency flexible or we have other means.'' This
is just such a means.
This is a real problem. No more excuses. Goodwill isn't enough. We
need a real answer. This is a real answer. Support this legislation.
Mr. PASCRELL. Mr. Speaker, I want to thank Chairman Levin for
bringing this bill to the floor today, as well as the sponsors of this
legislation, Mr. Ryan and Mr. Johnson for working in a bipartisan way
on behalf of America's workers and manufacturers.
In the Ways and Means Committee, we have studied how China uses
``state capitalism'' to manipulate world trade to give its industries
an unfair advantage over the rest of the world, at the expensive of our
workers and businesses.
Currency manipulation is just the tip of the iceberg. China provides
government subsidizes to favored industries--notably green technology,
selectively rebates its value added tax to penalize imports and
encourage exports, imposes restrictive local content rules, and
practices an ``indigenous innovation'' policy. We must deal with each
of these issues as a part of a broad strategy.
Everyone acknowledges the reality that China's currency is
fundamentally undervalued. My friends on the other side of the aisle,
the Administration, our international partners, and even China itself
have all said the RMB could and should appreciate.
However, despite this widespread consensus, China has not taken any
meaningful steps to correct this manipulation that disrupts the flow of
international trade.
With the passage of this bill today, we signal to China that enough
is enough. The free ride is over. We will not stand by while we lose
1.5 million Americans jobs and shave 1.5 percent off of our GDP every
year.
I hope that this legislation will cause China to change its behavior
and strengthen the Administration's hand in multilateral negotiations.
But after 8 years of asking nicely, the Congress will not be silent
anymore.
We must allow American industries to respond to the injury being
caused by this policy, and H.R. 2378 will help level the playing field,
plain and simple--when the playing field is level, the American worker
can out-compete anyone.
Our system of international trade only works when everyone plays by
the same rules. By passing this legislation, we stand up for that
system, and stand up for American workers and businesses.
Mr. HOLT. Mr. Speaker, I rise in support of H.R. 2378, the Currency
Reform for Fair Trade Act. For every worker, every business, and every
nation to get a fair shake in today's global economy, everyone must
play by the rules. For too long, China has violated the rules of the
global economy by deliberately undervaluing its currency. This practice
reduces the costs of Chinese exports and makes it more expensive to
export U.S. products to China, giving China an unfair advantage and
making it difficult for U.S. companies
[[Page H7270]]
to compete. I hear far too often from workers in central New Jersey who
have been victims of this unfairness. They are laid off as their
employers are undercut by Chinese competitors and forced to cut jobs or
go out of business.
That story is repeated time and again around the country, and our
economy suffers. The U.S. trade deficit with China ballooned from $10
billion in 1990 to $226 billion in 2009. Economists estimate that
China's currency manipulation reduces U.S. Gross Domestic Product by
1.4 percentage points annually and has led to the loss or displacement
of millions of manufacturing jobs over the last decade. One recent
study concluded that the increasing trade deficit with China will cost
over 500,000 U.S. jobs in 2010 alone.
The Currency Reform for Fair Trade Act gives the Department of
Commerce the necessary tools to combat unfair manipulation of foreign
currencies. Upon finding that currency manipulation meets the criteria
for an export subsidy, the Department will have the authority to
correct the unfair advantage by impose countervailing duties that are
consistent with World Trade Organization regulations. When they have a
level playing field, Americans can and will out-compete their
international counterparts every time. Passing this bill is an
important step in preserving a fair world market for U.S. goods,
revitalizing our domestic manufacturing base, and creating jobs for
American workers.
Mr. KUCINICH. Mr. Speaker, I rise in strong support of H.R. 2378, the
Currency Reform for Fair Trade Act. This legislation addresses the
suppression of the renminbi--or RMB--the official currency of the
People's Republic of China. The suppression of the RMB allows China to
make its exports cheaper and thus makes foreign imports into China more
expensive. As Chinese trade deficits continue to grow, so too does the
negative impact on American workers, many of whom have been displaced
by the growing trade deficit.
This legislation requires the Department of Commerce to levy
countervailing duties if the affected U.S. company can prove it has
been ``materially injured'' by imports from any country with
undervalued currency. I strongly support the legislation and the
remedial tools it provides to the Department of Commerce and American
workers.
According to the Economic Policy Institute (EPI), ever increasing
China trade deficits will displace between 512,000 and 566,000 jobs in
the U.S. just this year. Between 2001 and 2007, 561,000 jobs were
displaced by the China trade deficit. Two-thirds of the jobs displaced
were in the manufacturing sector.
At the same time, we must remember that if we are trying to prevent
the loss of more American jobs, we cannot forget about the reasons we
have lost jobs in the U.S. We need to talk about the free trade
policies we have actively pursued that have shipped American jobs
overseas and left the American manufacturing sector in shambles.
The consideration of H.R. 2378 is an indication that we must do more
to ensure that American industries, as a foundational part of our
economy, remain strong. But it is not enough. Ohio has seen far too
many idling manufacturing mills and hundreds of long-time steel workers
being laid off at once. According to Public Citizen, of the 22 million
jobs expected to be created in the U.S. between 2000 and 2010, only
187,000 or 0.1 percent will be manufacturing jobs. Ohio is one of the
top ten states posting the biggest job losses in the manufacturing
sector.
We cannot have a strong American economy without a strong industrial
manufacturing sector that includes not only the steel industry, but
also the auto, shipping and aerospace industries. Addressing our trade
deficit and foreign policies that add to it is important. But it is
also about addressing our policies. I am the proud author of H. Res.
444, which says that the steel, automotive, aerospace and shipping
industries are vital to America's national and economic security. We
need a coordinated federal policy that puts the manufacturing sector
back in its rightful place as an engine of the American economy.
I strongly support passage of this legislation and will continue to
work to shore up our local manufacturing base and protect American
workers.
Mr. CONYERS. Mr. Speaker, international trade is an integral part of
the Southeast Michigan economy, with nearly $113.3 billion worth of
surface trade passing between the United States and Canada at the
Detroit-Windsor border every year. I am, however, concerned that other
nations' unfair trade practices have significantly hurt American
workers. This is why I rise in support H.R. 2378, the ``Currency Reform
for Fair Trade Act,'' which will address currency manipulation.
Countries such as Japan and China have both manipulated their
currencies and hurt American exporters. For example, Japan's currency
has been undervalued by up to 25 percent in the past. This means that a
car imported from Japan for $20,000 has a hidden subsidy of up to
$5,000. According to General Motors' chief economist, Mustafa
Mohatarem, ``Japan's policies provided anywhere from a $2,000 to
$14,000 cash windfall for each of the 2.2 million vehicles Japan's
automakers exported to the U.S. in 2006.''
Even worse, China has undervalued its currency by up 40 percent in
the past, which has put American manufacturers at a severe
disadvantage. China's currency manipulation also attracts foreign
investment into China and away from American manufacturing facilities.
A recent study found that the U.S. has lost more than 2.3 million jobs
since 2001 just as a result of the U.S. trade deficit with China. On a
recent trip to China, President Obama urged the Chinese Yuan to
appreciate and prevent global imbalances.
The Currency Reform for Fair Trade Act will take important steps in
helping to address these unfair trade practices. The Act would empower
the Department of Commerce to make findings that identify currency
manipulation as an export subsidy. Today's legislation would make it
easier for the Department of Commerce to add a countervailing duty to
offset the amount of the export subsidy from currency manipulation. I
believe American manufacturers can have honest and fair competition
with foreign imports and thrive in global markets.
Mr. Speaker, in the American Recovery and Reinvestment Act, we hailed
the investments in green and renewable technologies. However, many
Americans green technology firms are being hurt by currency
manipulation and other subsidies. Just last week, the Steel Workers
filed a petition with the United States Trade Representative regarding
China's currency manipulation and other subsidies to the green
technology manufacturing industry. If the United States is to lead in
this industry as well as revitalize our manufacturing base, we need to
make sure American firms can compete on a level playing field in the
international market. I urge my colleagues to support today's
legislation.
Mr. SPRATT. Mr. Speaker, today, I rise to support a bipartisan bill
that will help rebuild our manufacturing sector and continue our
economic recovery.
I am proud to be a cosponsor of the ``Currency Reform for Fair Trade
Act.'' The legislation was introduced in response to China's persistent
intervention to keep its currency undervalued by 35-40 percent relative
to the dollar and its resort to illegal subsidies and non-tariff
barriers to promote its own industries at the expense of U.S.
manufacturing jobs.
These practices affect billions of dollars in trade and have allowed
China to flood our markets with their products while they limit our
ability to export our goods to them. Many companies are left with
little choice but to move their operations offshore in order to
compete, costing us precious jobs.
According to the textile industry, these unfair trade practices have
cost the United States over a million manufacturing jobs in the last
decade, including hundreds of thousands of textile and apparel jobs.
The devaluation of China's currency worsens the already severe U.S-
China trade deficit. Statistics show that between January 2000 and May
2009, China's share of the U.S. trade deficit for non-oil goods grew
from 26 percent to 83 percent. If we can convince the Chinese to stop
pegging its currency, U.S. exports would get a huge boost, and in time,
so would investment in new plant and equipment.
This is a great way to stimulate an economy on the mend without
adding a dime to the deficit or incurring new public debt.
Specifically, the ``Currency Reform for Fair Trade Act'' requires the
U.S. Department of Commerce to: (1) determine, based on certain
requirements, whether the exchange rate of the currency of an exporting
country is fundamentally and actionably undervalued or overvalued
(misaligned) against the U.S. dollar for an 18-month period; and (2)
take certain actions under a countervailing duty or antidumping duty
proceeding to offset such misalignment in cases of an affirmative
determination. This legislation provides U.S. manufacturers and workers
the necessary tools to defend themselves against anti-competitive trade
practices of foreign governments, whether it's China or any other
country.
About ten years ago, I joined Representative Sue Myrick in sponsoring
one of the first bills filed to force a change in China's currency
policy. The United States has been seeking to negotiate a solution to
the issue for a decade without success; and recent talks between the
Obama administration and Chinese officials have made marginal progress
at best.
All we're asking for here is a level playing field for U.S.
businesses.
Mr. STARK. Mr. Speaker, I rise today in support of H.R. 2378 the
Currency Reform for Fair Trade Act.
American manufacturing has a long and proud history, but for years
has lost hundreds of thousands of good paying jobs. Our workers are
losing jobs to China, a country that
[[Page H7271]]
blatantly violates international trade laws. The Chinese government's
prolonged and intentional intervention in its currency markets keeps
the price of Chinese goods in the United States artificially low and
the price of U.S. goods sold in China artificially high. With this
pricing advantage, manufacturing jobs move to China instead of staying
here in the U.S. Economists estimate that the Chinese currency is
undervalued by between 25 and 40 percent. How can our manufacturing
sector workers compete against a country that has the ability to
effectively subsidize its exports by 25 to 40 percent?
It is our responsibility to stand up and defend our workers against
these illegal practices. The Currency Reform for Fair Trade Act is just
the first step to level the playing field between U.S. and Chinese
manufacturers. The legislation expands our trade laws so that we can
better combat illegal practices by countries that seek unfair
advantages. The bill targets countries that persistently and
significantly undervalue their currency. When these illegal subsidies
harm a U.S. industry, our government will be able to impose
countervailing duties to negate their impact.
This legislation is not the cure all for our $266 billion trade
deficit with China, but it should help our manufacturers. Nobel
laureate Paul Krugman estimates that if China's currency manipulation
ended, we would gain 6,000 jobs per billion dollar shift in the trade
deficit and could therefore save or create 1.4 or 1.5 million jobs.
Fred Bergsten, the director of the Peterson Institute of International
Economics also offers an optimistic statistic, that an appreciation of
China's currency could generate 700,000 to 1 million U.S. jobs. We
cannot turn our back on this kind of job creation. I urge my colleagues
to support this bill to begin bringing good jobs back to America.
Mr. GENE GREEN of Texas. Mr. Speaker, I rise in support of the
Currency Reform for Fair Trade Act that is before the House today. I am
an original cosponsor of this legislation and strongly urge my
colleagues to support it.
As Americans continue to suffer from stagnant pay, underemployment,
and 9.6 percent unemployment, across the Pacific in the People's
Republic of China, business is booming. Almost all of this growth is
due to China's export sector, which is able to sell goods at low prices
and face little to no international competition domestically due to
China's manipulation of its currency, the Renminbi, RMB.
Economists from across the political spectrum estimate that the
Renminbi is undervalued by at least 35 to 40 percent. In other words,
U.S. goods are, at least 35 percent, more expensive for Chinese
consumers and make Chinese goods, at least 35 percent, cheaper in the
United States.
China's currency manipulation has had terrible effects for competing
economies from around the globe. Nations that rely heavily on
exportation for growth, such as Japan and South Korea, have begun or
are taking measures to emulate Beijing's manipulation of their own
currencies so their goods can compete.
In the United States, the non-partisan Economic Policy Institute has
estimated that between 2001 and 2008 alone, the growing trade deficits
with China have displaced 2.4 million jobs. Sixty percent of these jobs
were in the manufacturing sector, the very sector that has given
millions of Americans a path into the middle class.
If China allowed its currency to ``float'' on the international
market, in a fashion similar to the U.S. Dollar, British Pound, and
Japanese Yen, it could create a million U.S. manufacturing jobs and cut
our trade deficit with China by $100 billion a year, with no cost to
the U.S. Treasury.
For years, this Congress, as well as the Administrations of President
Bush and President Obama, have tried to persuade the Chinese government
to moderate or end the manipulation of its currency. No significant
progress has been made.
It is time we take action to hold China accountable for their market
distortion and protectionist practices.
A vote ``yes'' today is a vote to stand up for American workers, to
take strides to boost our economy, and to strengthen our domestic
manufacturing sector.
Mr. TURNER. Mr. Speaker, today I speak in favor of H.R. 2378, the
Currency Reform for Fair Trade Act, which seeks to level the playing
field for American companies, some of whom have found themselves unable
to compete with foreign companies who are unfairly subsidized by
foreign governments.
Mr. Speaker, I would like to take my time to recognize the work of
former Congressman Phil English, who represented the 3rd District of
Pennsylvania until the 111th Congress. Congressman English was a long-
time supporter of American manufacturers and was a champion of raising
awareness and solving the problem of illegal trade practices.
Congressman English raised these issues when he introduced H. Res.
414 in the 108th Congress. The resolution, which encouraged China to
engage fair currency valuation, passed nearly unanimously (411-1) in
October 2003.
In the 109th Congress, Representative English introduced the first
China currency bill in the House--H.R. 3004, the Currency Harmonization
through Neutralizing Action, CHINA, Act. The bill directed the Treasury
Department to analyze the exchange rate policies of the People's
Republic of China, and to impose additional tariffs, if necessary, to
equalize any currency manipulations.
He also helped advocate for the Department of Commerce to consider
countervailing duty cases for nonmarket economies, such as China. First
introducing this legislation in the 106th Congress, H.R. 3198, he
pushed to clarify the countervailing duty statute to ensure these cases
against China could proceed.
In the 109th Congress, the House passed H.R. 3283, English's bill to
apply the countervailing duty law to nonmarket economies. It was after
this bill passed the House that the Department of Commerce ultimately
reversed its own policy and started accepting countervailing duty cases
against China.
Mr. Speaker, as we look to help our domestic industry compete against
unfair competition abroad, H.R. 2378 is an important step.
Mr. MANZULLO. Mr. Speaker, this day has been long in coming. In 2003,
I was one of the first Members of Congress to introduce legislation on
this topic to stop this anti-free market practice of foreign
governments of deliberately undermining the value of their own currency
to make their exports less expensive and foreign imports more costly.
We have had some modest progress over the years but the overall
practice continues to the detriment of our manufacturers and farmers.
Currently, counties in northern Illinois have an official
unemployment rate of between 8 and 16.4 percent. The unemployment rate
in the cities of Rockford, Belvidere, and Freeport are 17.4 percent,
17.8 percent, and 13.3 percent respectively. But if you include those
who have given up looking for work, the real unemployment rate for
these counties and cities is probably somewhere between 18 and 28
percent. We can't wait any longer for more promises to solve this
problem in the future.
I am pleased to support the ``new and improved version'' of the
legislation introduced by my fellow co-chair of the House Manufacturing
Caucus, Representative Tim Ryan of Ohio, to combat exchange rate
misalignment by China and other foreign governments. I am a proud
original co-sponsor of this legislation. Regardless of any person's
view on free trade, opposing exchange rate undervaluation is an area
where both sides of the trade debate should come together. We must take
a stand to stop China and other nations from making their imports
cheaper in the U.S. and our exports more expensive in their country.
Let me relate the experience of one manufacturer from Rockford,
Illinois, Jerry Busse of Rockford Toolcraft. He was quoted in the
Rockford Register Star last August saying, ``We have done work for a
big manufacturer in Chicago for 20 years. All of a sudden we lost a lot
of their business because they decided to move the work to China.''
Jerry Busse asked the Chicago company what he had to do to get the work
back. The prices they were getting from China were close to what
Rockford Toolcraft had been getting. Jerry Busse thought to himself
that he could do the work for that amount but the Chicago company
refused. According to Jerry Busse, the management of the Chicago firm
said anyone in America has to be 30 percent under the Chinese price.
Mr. Speaker, 30 percent is approximately the undervaluation of the
Chinese currency. Suffice it to say that Rockford Toolcraft couldn't
meet this predatory price and lost a customer.
Despite any differences we may have over trade policy, we should all
agree on the need to stop foreign governments from undervaluing their
currencies to gain an economic advantage over us by making their goods
artificially less expensive in the United States and making our exports
more expensive overseas.
This bill is not targeted at one country. Currency undervaluation is
not just a problem that plagues our trade relationship with China.
About two weeks ago, Japanese monetary authorities sold a large amount
of yen against the dollar to stem the Japanese currency's sharp
appreciation against the U.S.--the first time since 2004. Other
countries have joined in this anti-capitalistic, mercantilist behavior
over the years and they should be equally condemned. It is in their
long-term self interest to eventually move to a valuation of their
currency that is based on the marketplace--not by a government
official.
Fred Bergsten, Director of the highly respected Peterson Institute
for International Economics, estimated that correction of all of the
Asian currency undervaluations would cut the global U.S. trade deficit
by about $100 billion and generate at least 700,000 jobs.
This legislation provides another weapon in our trade arsenal to
empower our trade enforcement officials to confront unfair trade
practices by China and others. The revised bill
[[Page H7272]]
gives discretion to the Department of Commerce to consider currency
undervaluation as another form of a government subsidy that is eligible
for higher countervailing duties.
This legislation is preferable to other bills that would impose
blanket, across-the-board tariffs on just Chinese goods that would
almost immediately be ruled illegal by the World Trade Organization.
This approach is WTO compliant and does not target one specific country
over another for currency undervaluation. This bill should unite both
spectrums of the trade debate and one that should send shockwaves to
capitals of foreign governments that deliberately undervalue their
currency for a trade advantage. The frustration level is high among our
small manufacturers such as Jerry Busse and the time is ripe for
Congress to act.
I'm here as a proponent of free but fair trade in support of this
carefully crafted legislation and I urge my colleagues to do the same.
If you want to stop Chinese imports coming in at predatory prices and
give our manufacturers and farmers the chance to fairly compete, then
support this bill. If you don't like government subsidies and
interference in the marketplace; if you prefer capitalism to
mercantilism; then you vote for this bill.
Mr. VAN HOLLEN. Mr. Speaker, I rise in strong support of H.R. 2378,
the Currency Reform Fair Trade Act.
First, I want to thank Chairman Levin and his staff for crafting this
responsible and much needed WTO compliant legislation.
There is wide agreement that China is deliberately and illegally
intervening in global currency markets to benefit its own economy.
According to the Peterson Institute of International Economics, because
of repeated Chinese government intervention, the RMB is unfairly
undervalued by as much as 24 percent against the dollar.
This practice is harming the U.S. economy and weakening our ability
to promote economic growth and jobs. Again, according to the Peterson
Institute, if the RMB was fairly valued, there would be 500,000 more
Americans employed today in good paying manufacturing jobs.
The President's strategy for boosting the economy includes a two year
plan to increase manufacturing and expand exports--but increasing
exports in a global economy where American goods are artificially more
expensive than comparable Chinese goods, is like fighting an uphill
battle.
H.R. 2378 will help encourage the Chinese government to do the right
thing and float its currency in a wider band. This will help to protect
those American businesses and jobs that are being injured by the
imbalance.
Specifically, the bill requires the Department of Commerce to view
deliberate currency undervaluation as an illegal export subsidy just as
the World Trade Organization does. If this bill becomes law, Commerce
will have to use the same standard as the WTO when determining whether
an illegal export subsidy exists. Commerce will have to weigh all
relevant factors, including currency undervaluation, when determining
whether to recommend that ``countervailing duties'' be applied against
a foreign import.
This bill does not just target China, though China is the leading
abuser of this practice. Any country that unfairly and significantly
acts to suppress the value of its currency to boost its own exports
will be a target.
The President's plan for strengthening the economy includes a
vigorous enforcement of our rights in the global trade arena. The WTO
says we have a right to respond when our trading partners employ
illegal practices that injure our businesses. H.R. 2378 ensures that
the Department of Commerce does not overlook or underestimate the
impact that currency undervaluation has on American businesses.
I encourage my colleagues to support this measure. It provides one
more tool that can be used to protect American companies and the
workers they employ in the ongoing push to boost the U.S. economy.
Mr. DINGELL. Mr. Speaker, I rise in strong support of H.R. 2378, the
Currency Reform for Fair Trade Act, of which I am also a co-sponsor.
For too long, the United States has stood idly by while its trading
partners--China, in particular--have manipulated the value of their
currencies to gain a competitive advantage. H.R. 2378 will strengthen
our country's ability to impose punitive tariffs on currency
manipulators and, in so doing, help protect American workers and
businesses from this most unfair trade practice.
I wish to thank Congressman Ryan of Ohio for introducing this fine
bill. I also commend my good friend and colleague from Michigan,
Chairman Sander Levin of the Committee on Ways and Means, for
understanding the dire need for this legislation and amending it in
such a manner that conforms to the United States' obligations as a
member of the World Trade Organization. I hope China will take note of
this and adjust its behavior accordingly.
I urge my colleagues to vote in favor of H.R. 2378 and further call
on the United States Senate to pass this bill with all due haste.
Mr. LEVIN. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. Pursuant to House Resolution 1674, the
previous question is ordered on the bill, as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Mr. LEVIN. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 15-
minute vote on passage of H.R. 2378 will be followed by 5-minute votes
on motions to suspend the rules with regard to:
H.R. 6160, by the yeas and nays;
H.R. 4072, by the yeas and nays;
H.R. 3421, de novo.
The vote was taken by electronic device, and there were--ayes 348,
noes 79, not voting 6, as follows:
[Roll No. 554]
AYES--348
Ackerman
Aderholt
Adler (NJ)
Akin
Altmire
Andrews
Arcuri
Austria
Baca
Bachus
Baird
Baldwin
Barrett (SC)
Barrow
Bean
Becerra
Berkley
Berman
Berry
Biggert
Bilbray
Bilirakis
Bishop (GA)
Bishop (NY)
Bishop (UT)
Blumenauer
Boccieri
Bonner
Boozman
Boren
Boswell
Boucher
Boyd
Brady (PA)
Braley (IA)
Bright
Brown (SC)
Brown, Corrine
Brown-Waite, Ginny
Burgess
Burton (IN)
Butterfield
Calvert
Camp
Cao
Capito
Capps
Capuano
Cardoza
Carnahan
Carney
Carson (IN)
Cassidy
Castle
Castor (FL)
Chandler
Childers
Chu
Clarke
Clay
Cleaver
Clyburn
Coble
Coffman (CO)
Cohen
Cole
Connolly (VA)
Conyers
Cooper
Costa
Costello
Courtney
Crenshaw
Critz
Crowley
Cummings
Dahlkemper
Davis (AL)
Davis (CA)
Davis (IL)
Davis (KY)
Davis (TN)
DeFazio
DeGette
DeLauro
Dent
Deutch
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Dingell
Doggett
Donnelly (IN)
Doyle
Driehaus
Duncan
Edwards (MD)
Edwards (TX)
Ehlers
Ellison
Ellsworth
Emerson
Engel
Eshoo
Etheridge
Farr
Fattah
Filner
Forbes
Fortenberry
Foster
Foxx
Frank (MA)
Fudge
Gallegly
Garamendi
Gerlach
Giffords
Gingrey (GA)
Gonzalez
Goodlatte
Gordon (TN)
Graves (MO)
Grayson
Green, Al
Green, Gene
Griffith
Grijalva
Guthrie
Gutierrez
Hall (NY)
Halvorson
Hare
Harman
Harper
Hastings (FL)
Heinrich
Herseth Sandlin
Higgins
Hill
Himes
Hinchey
Hinojosa
Hirono
Hodes
Hoekstra
Holden
Holt
Honda
Hoyer
Hunter
Inglis
Inslee
Israel
Jackson (IL)
Jackson Lee (TX)
Johnson (GA)
Johnson (IL)
Johnson, E. B.
Jones
Kagen
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick (MI)
Kilroy
Kind
Kirk
Kirkpatrick (AZ)
Kissell
Klein (FL)
Kosmas
Kratovil
Kucinich
Langevin
Larson (CT)
LaTourette
Lee (CA)
Lee (NY)
Levin
Lewis (GA)
Lipinski
LoBiondo
Loebsack
Lofgren, Zoe
Lowey
Lucas
Luetkemeyer
Lujan
Lungren, Daniel E.
Lynch
Maffei
Maloney
Manzullo
Markey (CO)
Markey (MA)
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum
McCotter
McDermott
McGovern
McHenry
McIntyre
McKeon
McMahon
McNerney
Meek (FL)
Meeks (NY)
Melancon
Mica
Michaud
Miller (FL)
Miller (MI)
Miller (NC)
Miller, George
Minnick
Mollohan
Moore (KS)
Moore (WI)
Moran (KS)
Moran (VA)
Murphy (CT)
Murphy (NY)
Murphy, Patrick
Murphy, Tim
Myrick
Nadler (NY)
Napolitano
Neal (MA)
Nye
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor (AZ)
Payne
Pelosi
Perlmutter
Perriello
Peters
Peterson
Petri
Pingree (ME)
Pitts
Platts
Pomeroy
Posey
Price (NC)
Putnam
Quigley
Rahall
Rangel
Rehberg
Reyes
Richardson
Rodriguez
Roe (TN)
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Rooney
Ros-Lehtinen
Roskam
Ross
Rothman (NJ)
Roybal-Allard
Royce
Ruppersberger
Rush
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schauer
Schiff
Schock
Schrader
Schwartz
Scott (GA)
Scott (VA)
Sensenbrenner
Serrano
Sestak
Shea-Porter
Sherman
Shimkus
Shuler
Shuster
Simpson
Sires
Skelton
Slaughter
[[Page H7273]]
Smith (NJ)
Smith (WA)
Space
Speier
Spratt
Stark
Stearns
Stupak
Sutton
Tanner
Taylor
Teague
Terry
Thompson (CA)
Thompson (MS)
Thompson (PA)
Tiberi
Tierney
Titus
Tonko
Towns
Tsongas
Turner
Upton
Van Hollen
Velazquez
Visclosky
Walz
Wamp
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch
Westmoreland
Whitfield
Wilson (OH)
Wilson (SC)
Wittman
Wolf
Woolsey
Wu
Yarmuth
Young (AK)
NOES--79
Alexander
Bachmann
Bartlett
Barton (TX)
Blackburn
Boehner
Bono Mack
Boustany
Brady (TX)
Broun (GA)
Buchanan
Campbell
Cantor
Carter
Chaffetz
Conaway
Cuellar
Culberson
Djou
Dreier
Flake
Fleming
Franks (AZ)
Frelinghuysen
Garrett (NJ)
Gohmert
Granger
Graves (GA)
Hall (TX)
Hastings (WA)
Heller
Hensarling
Herger
Issa
Jenkins
Johnson, Sam
Jordan (OH)
King (IA)
King (NY)
Kingston
Kline (MN)
Lamborn
Lance
Larsen (WA)
Latham
Latta
Lewis (CA)
Linder
Lummis
Mack
Marchant
McCarthy (CA)
McCaul
McClintock
McMorris Rodgers
Miller, Gary
Mitchell
Neugebauer
Nunes
Olson
Paul
Paulsen
Pence
Poe (TX)
Polis (CO)
Price (GA)
Reichert
Ryan (WI)
Scalise
Schmidt
Sessions
Shadegg
Smith (NE)
Smith (TX)
Snyder
Sullivan
Thornberry
Tiahrt
Walden
NOT VOTING--6
Blunt
Buyer
Delahunt
Fallin
Radanovich
Young (FL)
{time} 1757
Messrs. POE of Texas, TIAHRT, ISSA, and WALDEN changed their vote
from ``aye'' to ``no.''
Messrs. MILLER of Florida, GRIFFITH and ROYCE changed their vote from
``no'' to ``aye.''
So the bill was passed.
The result of the vote was announced as above recorded.
The title was amended so as to read: ``A bill to amend title VII of
the Tariff Act of 1930 to clarify that countervailing duties may be
imposed to address subsidies relating to a fundamentally undervalued
currency of any foreign country.''.
A motion to reconsider was laid on the table.
____________________