[Congressional Record (Bound Edition), Volume 157 (2011), Part 10]
[Senate]
[Pages 14431-14432]
[From the U.S. Government Publishing Office, www.gpo.gov]




              CURRENCY EXCHANGE RATE OVERSIGHT REFORM ACT

  Mr. SESSIONS. Mr. President, I wish to speak on the Currency Exchange 
Rate Oversight Reform Act, S. 1619, on which I believe we will be 
voting. I support it, as I expect my colleague from Arizona does with 
his principal commitment to trade and vibrant competitive commerce in 
the world.
  I acknowledge that our commitment to commerce and trade is 
fundamental to our Nation. America has always been a country with open 
ports and open markets. When trade is conducted properly, I am 
convinced it creates a rising tide of prosperity in America and around 
the world. I am not against trade. More than that, I think the 
voluntary exchange of goods does promote the free exchange of ideas. 
Trade helped us to export our values of a free democratic society, but, 
like democracy itself, trade must operate under a set of rules and 
values.
  Jobs have been lost as a result of unfair trade practices. Perhaps 
the most dramatic unfair trade practice existing in the world today is 
China's very substantial manipulation of its currency--a 30-percent, 
40-percent, 25-percent alteration in the value of its currency--and it 
has created an extraordinary deficit that has cost jobs in this 
country. Whether it is 2 million or fewer, it has cost jobs of decent, 
hard-working Americans. It has occurred because of manipulation of the 
currency. It is a very real matter.
  We need to fight for and aggressively defend every single job this 
country has, and we need to say no to unfair trade practices. We are 
going to insist that the trade rules apply both ways, that we don't 
unilaterally accept virtually anything while some of our trading 
partners--particularly China--can systematically violate them. I think 
fairness is the right thing, and we must refuse to acquiesce and accept 
this existing trade practice.
  Look, nations whose economies have historically struggled are those 
that have failed to uphold the rule of law. In my view, that is a 
fundamental part of America's greatness--our commitment to law--and it 
has made us economically powerful, as well as free.
  Many nations that have been unable to ensure contracts are honored 
and protect the integrity of financial agreements can't be successful 
in a commercially competitive world. When companies form a business 
partnership, they sign a contract to ensure that each party meets its 
obligations. The principle is the same with free trade. A trading 
partnership with China or other countries must be founded on principles 
upon which both parties can agree, principles and agreements which are 
to the mutual benefit of both parties. It is the job of our leaders to 
negotiate these agreements on behalf of the American workers, not to 
stand against them.
  This is even more crucial with a nation such as China, which 
relentlessly, through its political apparatus, seeks to advance its own 
national interests. China's currency manipulation clearly puts American 
workers and U.S.-based businesses at a huge disadvantage, particularly 
in this time of economic hardship. This unfairness has to be 
confronted. We have talked about it but have not confronted it.
  Almost all economists agree that China intentionally undervalues its 
currency--RMB--by as much as 30 percent.
  The Employment Policy Institute argues this:

       This intervention makes the RMB artificially cheap relative 
     to the dollar, effectively subsidizing Chinese exports.

  Where? Mostly to the United States. So I believe the devaluation of 
the currency clearly subsidizes exports of Chinese goods to the United 
States.
  They go on to say this:

       Currency intervention also artificially raises the cost of 
     U.S. exports to China. . . .

  So our goods that go there are higher in China than they would be, 
making the Chinese less able to buy them than otherwise would be the 
case. The goods they ship to the United States come in cheaper than 
they otherwise would be, making them more attractive to American 
consumers. This is a big factor in the surging and huge trade deficit 
between our countries. I think it is indisputable that is so. In other 
words, the Chinese give their products a 30-percent discount in the 
United States and make our exports cost 30 percent more in China. I 
think few economists would argue with that.
  China's currency manipulation has been a major factor in the erosion 
of our Nation's manufacturing base and left millions of U.S. workers 
without jobs. It is a factor in job loss in America. In Alabama, the 
EPI estimates--and I don't know whether this is an accurate number. I 
am sure we have lost jobs as a result of this currency manipulation, 
but this is the estimate the EPI had: It has put more than 44,000 
people out of work in Alabama since 2001--44,000. We just celebrated a 
number of economic developments in my State. We have been having some 
success over the years. We have 3 automobile plants, with investment 
from abroad, and each one has added about 4,000 jobs. According to this 
study, we have lost 44,000 jobs to China as a result of this currency. 
Again, there are disputes about how much and how large the impact is. I 
don't think there is any doubt it is substantial. We have been feeling 
it for years.
  Another recent study reached a similar conclusion. It was written up 
in the Wall Street Journal. It found that regions exposed to trade 
within the United States from China lose more manufacturing jobs and 
see an overall decline in unemployment than other areas. They also 
found that exposure to Chinese imports led to larger increases--and 
this is common sense--in unemployment; it cost jobs in certain areas in 
the United States; it led to larger increases in unemployment 
insurance, government payments, food stamps, disability payments, and 
other government benefits.
  Based on data in the study, the $300 billion increase in Chinese 
imports since 1992 has cost the Federal Government more than $20 
billion in such expenditures. They calculated $20 billion simply based 
on the increases in food stamps, unemployment insurance, and the like. 
The irony behind this is that we borrow much of the money we use to pay 
these Federal benefits from the Chinese, which they then use to 
continue manipulating their currency. So we are being outmaneuvered and 
outnegotiated in the process.
  Last year, Dan DiMicco, chairman, president, and CEO of Nucor 
Corporation, which has five steel mills in Alabama, my State--smaller 
steel mills--testified about modern steel mills. Mr. DiMicco is a 
national leader in American competitiveness and ideas. He testified 
before the House Ways and Means Committee, and this is what he said:

       Passing this legislation will help because this is a jobs 
     bill, pure and simple. It will do more to stimulate the 
     economy and create jobs than just about anything else 
     Congress can do. And it will not add to our national debt--
     just the opposite. Ending China's currency manipulation will 
     reinvigorate our manufacturing sector and our economy, 
     reducing our budget deficit. By failing to take the lead and 
     combat China's mercantilist trade practices, we are serving 
     up our jobs, future economic well-being, and national 
     security on a platter.

  That is a serious charge. This is a man who is dealing in the real 
world of steel production around the United States, with plants all 
over the United States. I think he knows a lot about what goes on in 
the world and how this system works.
  I believe the bill on which I have joined my colleagues is a 
thoughtful, commonsense approach. It doesn't place an immediate tariff 
on all Chinese goods that enter the United States. It does, however, 
explicitly direct the Commerce Department and International Trade 
Commission to take currency manipulation into account when estimating 
countervailing

[[Page 14432]]

and dumping duties. Under current law, the Commerce Department can take 
currency manipulation into account when calculating countervailing 
duties, but it does not take currency manipulation into account. It 
could, but it does not. The Obama administration has not instructed 
them to do so, and neither did his predecessor. Moreover, neither 
agency currently has the authority to include currency manipulation in 
its calculation of antidumping duties.
  The practical effect of this legislation would be to charge a duty on 
some imported products only after the International Trade Commission 
and Commerce Department conduct an investigation that determines 
dumping is taking place or a subsidy is being provided and that a U.S. 
company has been injured. So a duty would only be applied if it can be 
proved that the exporting country violated WTO rules. In other words, 
this measure upholds the rule of law.
  This has nothing to do with protectionism; rather, it is about 
protecting the principles that make free trade work. You can't have a 
free-trade relationship if your trading partners aren't complying with 
the fundamental expectations of fair trading partners.
  We don't live in a perfect world. Other nations, such as China, are 
more than willing to exploit our good will to gain political, 
strategic, and economic advantage. The time has come to defend our core 
economic interests. American workers are the best in the world. They 
are not asking us for a handout or a subsidy. What they are asking for 
are leaders who will defend their legitimate interests on the world 
stage. So far, this has not been done.
  I salute Senators Schumer, Brown, Graham, Burr, Snowe, Stabenow, and 
others who have supported the legislation. I think it is time for us to 
act, and I ask my colleagues to support the legislation as we move 
forward.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Illinois.

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