[Congressional Record Volume 156, Number 133 (Wednesday, September 29, 2010)]
[Extensions of Remarks]
[Pages E1864-E1865]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  PROVIDING FOR CONSIDERATION OF H.R. 2378, CURRENCY REFORM FOR FAIR 
                               TRADE ACT

                                 ______
                                 

                               speech of

                           HON. MARCY KAPTUR

                                of ohio

                    in the house of representatives

                     Wednesday, September 29, 2010

  Ms. KAPTUR. Mr. Speaker, I believe in free and fair trade among free 
peoples conducted under a rule of law. Our nation boasts the most open 
markets in the world. But not all the world's markets are open house; 
consequently, since 1975 our nation has amassed an enormous trade 
deficit that will top \1/2\ billion dollars this year.
  This trade gap has resulted in:
  35 years of outsourced jobs by the millions to penny wage 
environments.
  35 years of imports dwarfing our exports.
  35 years of buying from countries who will not buy as much from us.
  35 years of trying to penetrate the markets of countries who contort 
the trade and currency rules in their favor, not ours.
  As our nation climbs out of its deepest recession since the 1930s, we 
must rebalance our trade policies and take action to dig us out of this 
deep hole.
  Take the case of China. The massive hemorrhage of U.S. jobs and 
wealth to China is staggering--in 1990 America's trade deficit with 
China was $10.4 billion, and by 2000 it was up to $83.8 billion. As of 
July of this year we are already $145.4 billion in the red to Communist 
China. These deficits mean lost jobs in America, a shrinking middle 
class as production and wealth get shifted offshore.
  The evidence is all around us: Americans working harder each year, 
plants closing down despite increasing worker productivity. Now 
people's health and retirement benefits are cut, or they face 
unemployment, as their jobs are outsourced or destroyed
  This is not a recipe for a healthy economy nor a strong nation.
  How did this happen?
  The Chinese are gaining a mercantilist advantage in their economic 
practices, which some experts call ``market Leninism.'' They manipulate 
trade through several devices, the most potent of which is currency 
manipulation.

[[Page E1865]]

  We must take the necessary steps to create a level playing field for 
American workers and companies by holding China accountable for unfair 
devaluation by 40 percent or more of its currency.
  By making the Yuan cheaper than it should be, their goods are 40 
percent cheaper here and in global markets than American-made products, 
simply because of that government's actions.
  China manipulates its currency by making massive purchases of 
dollars, Euros, and Yen in the global exchange markets, intervening 
with tens of billions of purchases of other currencies weekly.
  The result: the U.S. GDP drops by 1.4 percentage points annually just 
because of China's currency manipulation.
  Jobs are lost, factories closed, and America's competitiveness 
weakens.
  The U.S. has the following four options:
  1. Negotiate with the Chinese to end their currency manipulation. The 
U.S. has been in such negotiations for 6 years. The talks have failed. 
That is why the Currency Reform for Fair Trade Act is so important.
  2. Intervene in the global currency market by selling massive amounts 
of dollars. Intervention would result in massive inflation and if the 
Chinese countered, it would not work.
  3. Seek WTO approval of global sanctions. This would take 3-5 years 
and there is no certainty that Europe or Japan would be supportive.
  4. Impose an Adjustable Currency Tariff (ACT). An ACT would be set at 
exactly the amount that the Yuan is undervalued. Under this proposal, 
the amount of the undervaluation would be set by some neutral 
international financial organization such as the IMF. The value of the 
ACT would be adjusted quarterly. As China changed the value of the 
Yuan, the value of the ACT tariff would be altered correspondingly. 
When China ended their manipulation, the ACT would be zero. This is not 
old-fashioned protectionism, but rather a remedy against such 
protectionism directed towards American-based production and jobs. The 
crisis is huge and we must act now.
  These corrections, including passage of H.R. 2378, if taken 
immediately, could create an estimated 500,000 manufacturing jobs here 
in the United States, helping to put Americans back to work and 
strengthening our economy.
  The Chinese government's currency policy is an impediment to this 
great Republic of ours. It kills American jobs and weakens our nation 
in the global markets. It is time that we take action to fix this 
broken policy and stand up for our nation.
  I urge my colleagues to join me in voting yes for this bill.

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