[Congressional Record (Bound Edition), Volume 151 (2005), Part 19]
[Senate]
[Pages 25931-25932]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              ASIAN TRADE

  Ms. STABENOW. Mr. President, President Bush arrived in Japan today 
and will meet tomorrow with Prime Minister Koizumi. Later this week, he 
will travel to China to meet with their President as well. It is time 
that we insist that the President use this opportunity, this important 
opportunity, to demand changes, changes in our economic relationship 
with China and with Japan. The President needs to say, as he is there 
with those leaders, that we will no longer accept their illegal trade 
practices that are costing American jobs, and we demand that changes be 
made; we no longer accept the fact that China and Japan manipulate 
their currency, which means their products are artificially lower than 
ours when they sell them into this country; we no longer accept that 
they are stealing our patents and our intellectual property.
  Last week, I was pleased to author a letter to the President with 
that very message on behalf of myself and 14 other Senators, urging him 
to make 2 major changes in our relationship with these important 
nations: No. 1, we need to end the rampant counterfeiting of American 
products that is occurring in China. It is estimated that 7 percent of 
world trade is in counterfeit goods, that the counterfeit market is 
worth $350 billion. It is estimated that in the auto industry alone, we 
lose over $12 billion annually to counterfeit auto parts, parts that 
are unsafe as well as costing us jobs. If you stop this illegal 
activity, the auto industry could hire an additional 200,000 workers--
200,000 workers in Michigan. That would equal our ability to cut our 
unemployment rate by two-thirds--200,000 people who are now challenged 
with losing their way of life, trying to figure out what they are going 
to do if they are making half or a third less of what they used to make 
because of what is happening in manufacturing in our country. People 
are paying more for health care and may very well lose their pension.
  We can do something about this if we simply change our relationship 
and send a strong message that we are going to put American businesses 
and American workers first. Our middle class clearly was built on 
manufacturing, and our manufacturers are having a hard time these days.
  It is critical that we continue to manufacture in this country. Is it 
changing? Has it changed? Of course, it is now high-tech manufacturing. 
When you walk into an automobile factory, it looks very different--
quiet, clean, computers, highly skilled workers--but we have to 
maintain a strong, vibrant manufacturing economy. We cannot just step 
back and say we are going to be a service economy now and let the rest 
of the world make things and grow things. That will lead to what is now 
becoming a race to the bottom for American families.
  The Economist Magazine recently reported a disturbing fact. This 
year, manufacturing jobs in the United States dropped below 10 percent 
of the population for the first time in history. This is not acceptable 
if we are going to continue to have our way of life in this country, 
and it is not necessary. If anyone believes that the middle class in 
this country can survive without a vibrant manufacturing sector, they 
are mistaken. As I indicated, we must make things in this country and 
add value to it as we do so, as well as grow things. That is a 
foundation of our economy, and that is what has created the wonderful 
middle class and the wonderful way of life we have enjoyed for so long 
as Americans.
  We can do better than this policy that is currently in place.
  The President must demand that China and Japan stop manipulating 
their currency. When they undervalue their currency, it makes U.S. 
exports to China artificially more expensive and places U.S. 
manufacturers at an unfair disadvantage in the Chinese market. It also 
makes their imports to us artificially less expensive, hurting 
manufacturers and costing American jobs. When they undervalue their 
currency, it is essentially an illegal subsidy of imports from China 
and a large tax on U.S. exports to China, and we need to call it the 
way it is. The President needs to be in China and call it for what it 
is.
  We are projected to finish this year with a record trade deficit of 
more than $700 billion. That is more than the budget deficit, up $100 
billion over the record $618 billion last year. China accounts for $200 
billion of this deficit, more than a quarter of the total trade deficit 
in our country. China is the largest contributor to the U.S. current 
account trade deficit, and therefore adjustment of its currency has to 
be a part of anything we do in revitalizing the manufacturing sector.
  China is not the only offender here. In 2003, the Bank of Japan spent 
$190 billion in global currency markets in order to manipulate and 
artificially weaken the yen. Japan continues this practice today by 
talking down the value of their currency, promising intervention if the 
yen moves out of a predetermined trading range.
  The President must insist that this stop if we are going to continue 
to have a relationship, an economic relationship with both of these 
countries. In fact, we can do something about currency manipulation 
right now. Every 6 months, the Secretary of the Treasury submits a 
report to us as to whether countries are manipulating. We expect to 
have a report in front of us this month, the month of November. 
Unfortunately, I expect it to say what it has always said, which is 
technically they are doing what we all know that they are doing, we all 
know. Any businessperson in my State can tell you that China is 
manipulating their currency. Talk to people in the auto industry, they 
will talk about Japan. And yet our own Treasury Secretary will not 
certify it is happening, giving us the tools to enforce against this 
illegal trade practice.
  Let me be very clear. Currency manipulation kills American jobs, and 
it is illegal, it is illegal under the WTO and IMF obligations. China 
says they want to be a part of the world community, the world 
marketplace. They have been allowed to do that. We now need to say to 
them very strongly, with this opportunity comes the responsibility to 
follow the rules.
  One of the things that is extremely concerning to me, when you look 
at currency manipulations, we have lost over 1.5 million manufacturing 
jobs because of this one policy that is illegal. The Treasury Secretary 
can do something about that by simply certifying that it is happening, 
and the President of the United States right now this week can look the 
President of China in the eye and say this is no longer going to be 
tolerated by the United States of America, we will not continue to lose 
manufacturing jobs and our quality of life in this country because they 
are not following the rules. Cheating is no longer allowed by China and 
by Japan.
  The bottom line is we can no longer continue to sit on the sidelines 
while our trading partners continue to artificially control prices, 
look the other way when it comes time to enforce intellectual property 
rights, and fail to live up to their obligations under the WTO and the 
IMF. It is not acceptable to say that we are going to throw open our 
economy in the international marketplace and not care what the rules 
are.
  Every other country cares what the rules are. The European Union took 
us to court because they felt we were unfairly subsidizing our 
businesses. They won. We changed our tax laws. We are the only country 
that does not seem to have policies that get it. This administration 
doesn't understand they are supposed to be on the same side of the 
table with American workers and

[[Page 25932]]

American businesses. It is time for that to happen. I urge the 
President to act now before our manufacturing economy and our middle-
class way of life is taken from us.
  Current Federal policies are based on a philosophy that says to 
Americans, you are on your own in a global economy; you are on your 
own, good luck. To American manufacturers, you are on your own; 
American workers, you are on your own.
  Mr. President, I believe that we are in this thing together, and 
Americans understand that we have a stake in what the rules are and an 
economy that works for everybody, an economy that puts Americans and 
American businesses first so that we can continue the great way of life 
that we have had in this country. Americans know that we are in it 
together and that together America can do better. I call upon the 
President to join us in the fight for our way of life in America.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator yields the floor.
  The Senator from Illinois is recognized.
  Mr. DURBIN. Mr. President, I thank the Chair.

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