[Congressional Record Volume 162, Number 24 (Wednesday, February 10, 2016)]
[Senate]
[Pages S808-S810]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             TRADE FACILITATION AND TRADE ENFORCEMENT BILL

  Mr. SESSIONS. Mr. President, tomorrow the Senate will be bringing up 
the Customs bill that I intend to support moving to. I believe it has a 
number of good provisions, and I hope to be able to support its final 
passage.
  But first, I want to bring attention to the weakened currency 
provisions that the conference report included. This is not the 
language that initially passed the Senate, but instead is much weaker.
  The Senate, several times, has affirmed the need to provide the 
Treasury Department and the Department of Commerce tools to prevent 
currency manipulation.
  In 2011, the Senate passed such a bill to provide the Commerce 
Department with enforcement mechanisms by a vote of 63-35.
  Second, in 2013, 60 Senators signed a letter to the U.S. Trade 
Representative, calling for the inclusion of enforceable currency 
provisions in Trans-Pacific Partnership.
  Finally, in May of 2015, the Senate passed by a 78-to-20 vote this 
Customs enforcement bill, which, for the first time, included new tools 
that are necessary to defend American manufacturers from foreign 
currency manipulations--the language to confront currency cheating that 
the Treasury Department acknowledges is occurring, but they have 
refused to take action to confront it.
  That original bill would have required, where this kind of currency 
manipulation occurs, action be taken to fix currency manipulation. 
Unfortunately, that language was removed from the conference report.
  I think it is time--and I think a bipartisan majority of this Senate 
believes it is time--for us to pass enforceable currency protection 
measures and make sure they make it to the President's desk.
  In June of 2015, a New York Times poll showed that 63 percent of 
Americans believe that trade restrictions are necessary, and only 16 
percent of Americans believe that the Trans-Pacific Partnership would 
actually increase American jobs. I am absolutely convinced the American 
people are correct on that, based on a study of previous trade 
agreements and the analysis of studies by Tufts University and other 
groups.
  A May 2015 poll conducted by Ipsos, a leading polling and 
communications firm, found that 73 percent of the U.S. public believes 
Congress should oppose any ``international trade agreement that does 
not specifically prohibit currency manipulation.'' That is a strong 
polling number.
  A second Ipsos poll, conducted last year, found that 79 percent of 
respondents said that it was important for the trade deal to include 
enforceable currency protections.
  In August, the Chinese Government devalued its currency 4 percent, 
creating a regional currency war in that area involving Australia, 
Malaysia, and South Korea. All those fell against the United States 
dollar, making their imports to the United States less expensive and 
our exports to their countries more expensive. It happens just that 
way.
  Former Federal Reserve Chairman Paul Volcker, one of the great heroes 
of the economic rebound of the 1980s, has said that years of trade 
negotiations can be wiped out in minutes by currency manipulation. I 
don't think there is any doubt about that.
  These depreciations throughout Asia further disadvantage American 
workers because they force our workers to compete against international 
competitors who receive discounts, in effect, on their exported goods 
in the form of artificially depressed currencies. These devaluations 
have a real impact.
  I have talked at length to steel manufacturers in my State. They have 
all told me that steel manufacturing is being hammered by this kind of 
currency manipulation, dumping, and other unfair, improper trade 
policies. But they specifically mentioned currency. Foreign market 
manipulations have virtually eliminated profit margins that were 
already slim in the steel industry.
  I had a conversation a few hours ago with a major paper company which 
said that currency manipulations have hurt their exports. They are 
still making the exports, but it has eliminated their profit. It is 
very problematic for them. They have to have profit, but they are 
trying to maintain their production, keep Americans working, and keep 
the plants operating, even though their profit margin has been hurt 
substantially by currency manipulation.
  In June of 2015, eBay reported that international currency 
fluctuations eliminated 8 percent of its sales. Instead of 6 percent 
sales growth, the company reported a 2 percent decline. Our foreign 
competitors are exporting their unemployment to the United States. That 
is the way it is done: You reduce your currency, and you export your 
products to the United States at a lower price. Our foreign competitors 
keep their people working and undermine the ability of American 
manufacturers to keep their employees working. Sometimes American 
plants are totally closed.
  A December 1 Wall Street Journal article highlighted the fact that 
the Chinese yuan had increased against most other major currencies but 
fallen 3 percent against the dollar. They let it decline against the 
dollar, thereby maintaining their trade advantage with the United 
States--their trade surplus, our trade deficit with China. Our trade 
deficit with China increased during January and increased substantially 
during the fourth quarter of last year. Our exports are down, our 
imports are up, and our trade deficit is up.
  A big part of that is improper manipulation of currency by our so-
called trading partners. It is time we said no to this. We have the 
leverage and the capability of doing so. They need us more than we need 
them.
  When Governor Romney ran for President 8 years ago, he was in a 
debate and explained it very succinctly: If you don't stand up--in this 
case, to China--they will run over you. Critics say that if we stand up 
to China, it will create a trade war. But we are in a trade war; we are 
just not fighting. Finally, he said: And, anyway, they have a lot more 
to lose than we do in such an event.
  We have no obligation--as a matter of fact, we must stop being a 
patsy for those who take advantage of us. They need our markets. They 
desperately need to be able to sell huge amounts of

[[Page S809]]

products in our markets. If they will not comply with the rules of 
trade, we have a right to say no and to limit access to our markets. 
They say that would hurt American consumers--perhaps some--but in the 
long run, we cannot allow American manufacturing to be decimated by the 
sustained manipulation of trading partners. We have to have a 
manufacturing base in this country. The American people know this, and 
they are worried about that.
  Even a Walmart executive has said: If nobody is working in America, 
who is going to buy cheap products from abroad? He even started a 
program to try to buy more from America.
  Even the Department of Treasury in its October 2015 exchange rate 
report said, ``Our judgment is that the [Yuan] remains below its 
appropriate medium-term valuation.'' In other words, it is depressed. 
China devalued the Yuan. They gained market advantage over the United 
States and other countries.
  On the face of all of this, the White House has refused to adopt any 
enforceable measures. The Treasury Department repeatedly acknowledges 
we have a problem, but they have refused to take any action to confront 
it. This is the kind of weakness we cannot accept. The time has come in 
America where we cannot afford to lose a single American job to unfair 
trading partners. We have to end this. We have to defend our people who 
are hurting.
  While the Trans-Pacific Partnership agreement that has now been 
signed by the President--off last week in New Zealand, 7,000 miles 
around the world. The President never even talked about it. Why didn't 
he talk about it? Why didn't they highlight it? Why did they want to 
sign it 7,000 miles away? The reason is, the American people don't want 
it. He didn't really want anybody to know he had signed it, and they 
hope they can slip it through Congress at some point. But I don't 
believe it is going to happen. I think too many things are being raised 
and discussed that show we have to be careful about these trade 
agreements. In particular, this is one that should not pass. The White 
House claims that the TPP includes a side measure addressing currency 
manipulation, but any study reveals that it does not have any real 
enforcement mechanisms.
  The Wall Street Journal on November 5 wrote this: ``Mexico, Canada 
and other countries signaled they were open to the [currency] deal when 
they realized it [would not] include binding currency rules that could 
lead to trade sanctions through the TPP.''
  Get that? They were objecting to this currency rule. They like to 
manipulate their currency, and they don't want to be subject to 
sanctions if they manipulate it. When they found out the truth--and the 
truth is that the currency manipulation language attached to TPP means 
nothing--then they said it was OK. So objected to addressing currency 
manipulation in the TPP until they found out this proposed fix meant 
nothing.
  On November 6, the Japanese Finance Minister, Mr. Taro Aso, said that 
``there [will not] be any change'' in Japan's currency policy. In other 
words, by signing on to the TPP, after studying the agreement, Japan 
realized they are not going to have to change their policy. There is no 
teeth to the President's side-agreement.
  We were expecting that this currency language would be placed on the 
Customs bill that we would vote on tomorrow. It was passed in the 
Senate, and it went on the Customs bill. But when it went to the 
conference committee, President Obama said: No, we are not having this 
currency language in it. The conference committee eventually 
capitulated, and struck the enforceable currency provisions in their 
report. So we have no real enforceable mechanism now to ensure that 
American workers and American manufacturing are able to maintain a 
level playing field with our trading partners in this regard.
  The statement by Japan's Finance Minister caused Ford Motor Company 
to immediately object to and oppose the Trans-Pacific Partnership 
agreement. They did it the day it was released. In their press release, 
Ford said they could not support such a deal in which currency rules 
fell ``outside of [the] TPP, and . . . [failed] to include dispute 
settlement mechanisms to ensure global rules prohibiting currency 
manipulation are enforced.'' They could not support it.
  Ford and all these companies are placed under terrific pressure to 
sign on to these deals. A lot of them that signed on and said they will 
support it don't like it, but they were basically put in a room and 
asked: What do you need to do? We will agree to some things if you will 
agree to support the deal. Many felt it was going to pass anyway, and 
they got a few little trinkets--a few little gifts out of the TPP that 
they liked out of the 5,000 pages that it consists of, and they have 
agreed to either be silent or support the deal. But many of these 
companies like Ford are very uneasy about it.
  So where are we today? I was very pleased that one of the strong 
supporters of trade in Congress--the new Speaker of the House, Paul 
Ryan--announced yesterday that there was not support in the House to 
pass the TPP now, and, in fact, he has concerns about it. He has been 
an advocate of these trade agreements. I have been worried about that. 
But I was very pleased that at least now, in the temporary situation, 
he has indicated that he has doubts about the agreement, it is not 
going to have the votes in the House.
  Our leadership has indicated they don't intend to bring it up 
immediately, either. I think that is a good decision. I believe we as a 
nation need to be studying how this works and studying whether these 
agreements are actually helping us. Or are they accelerating the 
decline in American manufacturing?
  The Bush nor the Obama White House has taken strong actions to deal 
with currency manipulations. This administration and its own Treasury 
Department continues to reassure us that they are doing everything they 
can to protect American manufacturing from unfair currency 
manipulation. However, they repeatedly rejected Congress's efforts to 
give the White House the tools they need to help enforce our laws. One 
of the best ways to do this is to give the White House the ability to 
implement countervailing duties, but they have opposed those efforts 
and steadfastly seen to it that they are not made law.
  Last year, in the spring, we had a month-long debate about the 
importance of these measures. I think a lot of our Members learned a 
good bit in the course of that. The Senate passed a TPP negotiating 
objective calling for enforceable measures in the President's trade 
agreement. What did the President do? He threatened to veto the Customs 
bill if it included the kind of currency language that I have just been 
describing.
  In fact, the White House even issued a Statement of Administration 
Policy--a SAP--on this question stating that ``the Administration 
opposes the way the [Customs] bill uses the countervailing duty process 
to address currency undervaluation.'' With that objection, the 
conferees took out the language, so the bill we will vote on tomorrow 
does not have the language in it that passed in the U.S. Senate with 78 
votes in favor.
  Last year, I wrote the President and asked him a few simple 
questions. I believe these are simple questions that the American 
people are entitled to have answered by the leader of our country who 
is proposing and pushing the TPP.
  One, I asked him to state whether the TPP would increase or decrease 
our trade deficit. Shouldn't we know that? Our trade deficit is 
surging. Some try to contend that trade deficits don't matter. They do 
matter. They do matter if your factory is closed. Trade deficits reduce 
GDP. Some studies say that about one-half percent of growth in GDP has 
been reduced as a result of the trade deficit. It does impact America.
  I further asked the President, two, whether the TPP would increase or 
decrease the number of manufacturing jobs in the United States.
  Third, I asked him how the TPP would affect the average hourly wages 
for the American middle class. Shouldn't he tell us that? Shouldn't we 
be told whether wages are going to go up or down? Shouldn't we be told 
whether the trade deficit would increase? Shouldn't we be told whether 
manufacturing jobs are going to increase or decrease?
  What have they said? This is so clever. I think the media deserves 
criticism for not talking about it more. All they have ever said was 
that the TPP would increase jobs in the exporting industries. They 
don't say how many jobs

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are being lost when American factories are closed. In fact, the 
Administration used to make specific job claims, but stopped doing so 
once the Washington Post gave their claim that the TPP would create 
600,000 jobs four Pinocchios.
  Let's go back to 2011, the U.S.--South Korean Free Trade Agreement. I 
voted for it. South Koreans are good people. They are allies of ours. 
We do business with them. I signed on to that agreement. When the 
President signed it, he stated to the American people it would increase 
our exports by $10 billion a year.
  We have had a chance to look at that. How has that promise come out? 
Have we increased our exports? Well, we did increase our exports. It 
was eight-tenths of $1 billion last year. I think we will be a little 
over $1 billion this year--not 10, 1. What about Korean exports to the 
United States? How did that come out? They increased annually $12 
billion a year. What about our trade deficit from 2010 through 2015? 
The trade deficit with South Korea increased 260 percent.
  Are these trade agreements effective? Are they helping America? Are 
they fulfilling the promises being made for them? I don't think so. The 
President has repeatedly rejected bipartisan efforts to put protections 
in for American workers. He clearly did not follow Congress's 
negotiating objectives. He has ignored an issue which the Senate 
overwhelmingly approved, and he failed to negotiate enforceable 
currency protections for American workers.
  American manufacturers cannot wait longer. It is time to give them 
the tools they need, a fair ability to compete, and a level playing 
field. The Customs bill that is before us is a step in the right 
direction. It ensures the Commerce Department and Customs and Border 
Protection share information more efficiently. It gives the Customs and 
Border Protection new tools to identify and stop illegal trading 
practices. It provides early notification of trade surges, which helps 
ensure stable prices of goods here at home, but it is important to note 
the Customs bill is not a perfect solution. There is still work to be 
done.
  As I noted, Paul Volcker pointed out, all of these agreements can be 
eliminated overnight through currency manipulation. We can pass this 
Customs legislation and send it to the President, but we must realize 
that the protections created in this legislation, the new tools that 
are provided to CBP, can be made irrelevant by our competitors that 
manipulate exchange rates to benefit their exports.
  We have that problem now in China, Japan, South Korea, and other 
countries. I am not going to be satisfied until the President signs 
legislation granting the Commerce Department real powers to protect 
American workers and American manufacturing from these devastating 
market manipulations.
  Our government does not offer such subsidies to American 
manufacturers. There are other subsidies, too, that foreign countries 
offer that we don't offer. These subsidies and currency manipulations 
are forbidden by international trading standards, but they go on 
anyway, and nothing is done about it. We must not allow other countries 
to take advantage of us any longer.
  I will note some of the quotes that we heard about this subject, but 
no action of significance has been taken.
  On September 3, Treasury Secretary Jack Lew in an interview on CNBC 
said, ``[China has] to understand, and I make this point to them quite 
clearly, that there's an economic and political reality to things like 
exchange rates.''
  He is talking about currency exchange rates. There is a political 
reality there. In other words, Mr. Lew, who should be doing something 
effective besides just talking, acknowledges that currency rates have 
real impact on Americans.
  He goes on to say:

       They need to understand that they signal their intentions 
     by the actions they take and the way they announce them. And 
     they have to be very clear that they're continuing to move in 
     a positive direction. And we're going to hold them 
     accountable.

  We haven't been holding them accountable.
  Mr. Lew continues: ``I think that we have been very clear for a very 
long time with China, how they manage their exchange rate is a matter 
of great concern to us and that they need to be willing to let market 
forces drive the value up, not just drive it down.''
  That is true, but they are not doing it, and China is going to 
continue to manipulate their exports until some action is taken to stop 
them.
  He said in his interview:

       I think it is something we will discuss at the G-20, is any 
     temptation to slip into what might look like a competitive 
     devaluation. It's both unfair and it ultimately leads to a 
     worse global economy.

  I think there is some truth to that. He is acknowledging that there 
is a problem. What he is saying is our response to devaluation--it is 
unfortunate if we are put in a position where we devalue, where Korea 
devalues, where Vietnam devalues, where other countries in the world 
devalue. That is a currency war and that is not helpful. What needs to 
happen is we need to push back against countries that are improperly 
devaluing and stop that and try to create a currency system worldwide 
that serves our Nation in an effective way. It is part of the whole 
economic future of America.
  Every business journalist is talking about this. They have different 
views about what ought to be done, if anything, but everybody talks 
about the impact.
  This is T. Rowe Price. They did their fall 2015 Economic Outlook 
Report.

       To be sure, the U.S. economy remains the world's largest 
     and most innovative. But this summer's dramatic plunge in 
     China's stock market and the unexpected devaluation of its 
     currency quickly reverberated around the globe--triggering 
     market volatility, dimming growth prospects for certain 
     industries and the countries, and exacerbating pressure on 
     emerging markets.

  I don't think anybody would dispute that. That is common business 
knowledge. T. Rowe Price's Outlook Report says:

       The devaluation, along with the government's unsuccessful 
     intervention in its plunging stock market, also undermined 
     confidence in China's leadership and, most important, in its 
     ability to manage the transition of its economy from one led 
     by investment and exports to one more driven by domestic 
     services and consumption.

  This is where we are. We need to get this ship on the right path, and 
we need to not adopt the TPP. We need to use the leverage we have as 
the greatest market in the world that all these countries want access 
to. We have the leverage. They have more to fear from a trade war than 
we do. We must put an end to it because we owe it to this country. The 
day we can give away more and more jobs and assume that this has no 
negative impact on the American economy is over. Wages are down in this 
country. The percentage of Americans of working age actually working 
today is the lowest we have had in nearly 40 years. We have had a 
tremendous drop in the percentage of males from 24 to 55, high working 
years, who are actually working in jobs today. It is a troublesome 
trend. We need to reverse that.
  We need to put people to work and get them off welfare. We need to 
put them in good job training programs to help them take jobs that 
already exist in the country. We can't afford to bring in hundreds of 
thousands and millions of people from abroad to take jobs. Our people 
should be trained and be taken. That is so basic as to be without 
dispute, it seems to me.
  I think the Customs bill that we consider tomorrow is worthy of our 
support. In the long run, I do believe that if we don't confront the 
trading issues that are facing America, we will regret it, and we will 
continue to see adverse economic consequences for the citizens we 
represent.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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