[Congressional Record Volume 157, Number 80 (Monday, June 6, 2011)]
[Senate]
[Pages S3499-S3500]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN (for himself, Mr. Enzi, Mr. Barrasso, and Mr. 
        Merkley):
  S. 1144. A bill to amend the Soda Ash Royalty Reduction Act of 2006 
to extend the reduced royalty rate for soda ash; to the Committee on 
Energy and Natural Resources.
  Mr. President, today my colleagues Sen. Barrasso, Sen. Enzi, Sen. 
Merkley, and I are introducing the Soda Ash Competition Act. Soda ash, 
or ``disodium carbonate'', is an industrial mineral used in the 
production of glass and other products. In 2006, in response to efforts 
by foreign competitors to subsidize non-U.S. production and gain 
competitive advantages in the world market, including the partial 
suspension of value added taxes, VAT, by China, Congress enacted 
legislation to provide a partial suspension of Federal royalties on the 
ore mined to produce soda ash on Federal lands for 5 years. This 
royalty relief reduced the Federal royalty rate from 6 percent to 2 
percent and helped U.S. soda ash producers to remain competitive in the 
international market. Over the past 5 years, the U.S. industry has been 
able

[[Page S3500]]

to invest hundreds of millions of dollars in production capacity and 
maintain its market here and abroad. As a result, American companies 
and workers have provided important economic activity here at home, 
provided a U.S. export valued at nearly $1 billion a year, all while 
continuing to generate tens of millions of dollars to the Treasury in 
mineral royalties.
  Foreign competition continues to be an issue for the U.S. soda ash 
industry, including unfair manipulation of value added taxes that would 
otherwise be levied on competing foreign supplies. In 2007, China 
resumed its practice of suspending part of the 17 percent VAT on 
synthetic soda ash to aid its domestic producers. On May 31, 2011, 
members of both the House and Senate wrote to Commerce Secretary Gary 
Locke and U.S. Trade Representative Ron Kirk requesting this unfair 
trade practice be raised with China through the Joint Commission on 
Commerce and Trade.
  The current statutory royalty relief authority for soda ash expires 
on October 12, 2011, and this bill would extend that authority for five 
more years. The Department of Interior is currently preparing an 
analysis, which will provide further information on the impact of the 
current soda ash royalty relief and foreign competition on U.S. 
producers. This study is required by the same 2006 law that authorized 
the current royalty reduction in order to give Congress additional 
information to consider a future extension. We had hoped that this 
analysis would have been completed by now and first wrote to the 
Secretary of Interior over a year ago seeking to expedite completion of 
the Department's work. Unfortunately, the analysis has not been 
completed and the statutory clock is ticking. My colleagues and I are 
introducing the bill at this time because, given the looming deadline, 
the Senate needs to begin examination of this matter sooner rather than 
later.
  We look forward to working with our colleagues on the Energy and 
Natural Resources Committee and the Senate to address this issue before 
time runs out on the current authority and U.S. soda ash production of 
this important mineral loses this tool to offset foreign production 
subsidies.
  Mr. President, I ask unanimous consent that a letter of support be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                Congress of the United States,

                                     Washington, DC, May 31, 2011.
     Hon. Gary Locke,
     U.S. Secretary of Commerce, Constitution Ave., NW., 
         Washington, DC.
     Hon. Ron Kirk,
     U.S. Trade Representative, 600 17th Street, NW.,
     Washington, DC.
       Dear Secretary Locke and Ambassador Kirk: We are writing to 
     express our continued concerns about China's use of a Value-
     Added Tax (VAT) rebate to promote its soda ash industry at 
     the expense of U.S. exports. For over two years, China has 
     provided its domestic manufacturers with an artificial 
     incentive to export through a 9% rebate of the 17% VAT. For a 
     number of reasons, we ask that the issue of the soda ash VAT 
     rebate be specifically included on the JCCT agenda this fall.
       After suspending its VAT rebate for soda ash in July 2007, 
     China reinstated the soda ash rebate in April 2009 to 
     encourage its own exports during the global economic crisis. 
     China's state-supported soda ash industry is the largest in 
     the world and this policy is harmful to its international 
     competitors, particularly U.S. soda ash manufacturers. As you 
     may know, U.S. soda ash has a natural advantage over Chinese 
     soda ash, based on a manufacturing process that is much more 
     sustainable in terms of environmental protection and energy 
     use than the synthetic processes used in China. China's 
     manipulation of the VAT rebate to support its domestic soda 
     ash industry also has wider implications--not only is it 
     economically unjustified, it contravenes China's own 
     interests in shifting energy resources from more productive 
     and efficient industries.
       We must focus on Chinese policies that are a direct threat 
     to U.S. exports and U.S. jobs. The soda ash VAT rebate is one 
     such policy. Chinese exports compete directly with U.S. soda 
     ash exports in the Asia-Pacific market and beyond. Although 
     the VAT is just one part of China's overall industrial 
     policy, the soda ash VAT rebate is a distinct threat to U.S. 
     manufacturing in a sector where the United States enjoys a 
     natural competitive advantage. If we don't stand up for the 
     pillars of our export-based manufacturers like the soda ash 
     industry--and the U.S. workers employed throughout the soda 
     ash supply chain--we cannot seriously contend we are doing 
     everything we can to support U.S. exports.
       We ask that the Department of Commerce and the U.S. Trade 
     Representative's Office ensure that the soda ash VAT rebate 
     is raised at the highest levels with Chinese officials at the 
     JCCT meetings this year. The message should be as clear as it 
     is convincing; namely, China should live up to its repeated 
     pledge to discourage the expansion of highly-polluting and 
     energy-intensive sectors such as its own soda ash industry. 
     Policies aimed at promoting soda ash exports, such as the VAT 
     rebate, are inconsistent with China's own stated goals and a 
     direct threat to U.S. interests.
       We greatly appreciate your consideration of this request 
     and look forward to your response.
         Senator Michael B. Enzi; Senator John Barrasso, M.D.; 
           Representative David Wu; Senator Joseph I. Lieberman; 
           Senator Robert Menendez; Representative Cynthia Lummis; 
           Senator Ron Wyden; Senator Jeff Merkley; Representative 
           James A. Himes; Senator Frank Lautenberg.
                                 ______