[Congressional Record (Bound Edition), Volume 161 (2015), Part 2]
[House]
[Pages 2146-2150]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     THE ISSUE OF TRADE IN AMERICA

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2015, the gentleman from New York (Mr. Tonko) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. TONKO. Mr. Speaker, I do appreciate the opportunity to utilize 
the time allotted to the Democrats in the House to speak to the issue 
of trade.

[[Page 2147]]

There are many who see this issue as an important issue.
  Others are now beginning to understand some of the dynamics as they 
relate to free trade versus fair trade and just what the dynamics of 
some of the last decades were, as recent past history has indicated, as 
they relate to American jobs and the American economy.
  This will be a good opportunity for us to address in fuller terms the 
issues of trade that we believe need to be addressed significantly well 
before we go forward with these negotiated contracts that could cause 
undesirable results, rather than those for which we all, I would 
believe, want to work--the opportunity to provide for individuals to 
tether the American Dream, to be able to go forth with dignity, to 
assume jobs that allow them to express their skills and God-given 
talents, and to be able to have that soulfulness of earning a paycheck.
  We want to focus on those issues here this evening. There are many 
who would suggest that a fast track is of great concern. Fast track is 
that circumventing of the responsibilities of Congress--the ability of 
Congress--to get more in depth with the proposed agreement, to 
understand fully what those impacts of the agreements might be on their 
local economy, on their State economy, and certainly on the national 
scene.
  It is important for us, I believe, to invest ourselves as a House. I 
would encourage those viewing this evening to ask their individual 
Members of Congress where they are on the fast track.
  Do you stand for the concept that goes back to the days of President 
Nixon, that gave a more expedited process and perhaps more authority 
over to the executive branch to get these contracts done? Or do you 
stand for the scrutiny that should rest with the Congress to make 
certain that no undue pressure is put on our local jobs and economy, 
falsely so?
  I believe that we do have that responsibility. As we have seen in 
recent years, we have grown the trade deficit of this Nation into the 
trillions of dollars. The challenge exists here, in the House, in this 
Congress, both Houses being faced with the added pressures of 
understanding what the dynamics of our trade deals are all about.
  The first step of which we express concern is that fast track concept 
where we, again, do not allow for the fullest efforts of Congress to be 
utilized--where we can amend, where we can adjust, where we can 
advise--and simply a thumbs-up/thumbs-down doesn't quite cut it for the 
people we represent, the working families the great many of us dub the 
``middle class of America.''
  As I enter into this discussion, I am reminded of the district that I 
represent in upstate New York that basically witnesses--hosts--the 
confluence of the Hudson River and Mohawk River.
  Those two valleys merge in the district that I represent, and they 
were the gateway, designed as an Erie Canal, barge canal system, that 
produced not only a stronger economy for New York, developed a port out 
of a little town called New York City, and then gave birth to a 
necklace of communities dubbed ``mill towns'' that became the 
epicenters of invention and innovation.
  It was there that many an immigrant tethered his or her dream, the 
American Dream, at those factory sites, where they were able to climb 
that ladder of opportunity, where they were able to lift their family's 
potential simply through the investment of hard work, pouring forth 
somehow their ability to land those jobs, and then to provide the 
creative genius that oftentimes developed new product lines or better 
product lines.
  That was a heyday of the American economy that, again, started 
through these mill towns. They became those locations of hope and 
prosperity. Then it led to a westward movement, an industrial 
revolution where we were the kingpin of the world's economy.
  We know the world dynamics are different today. We know that we need 
to adjust and respond, but we do that thoughtfully. We do it mindfully. 
We do it in a way that is academically measured, so that we don't 
introduce free trade but, instead, value fair trade, making certain 
that fair trade doesn't dispense unnecessarily of American jobs, that 
does not deflate our economy and finds us working on something, 
competing on something--the likes of an unlevel playing field. We need 
to have that level playing field be the result.
  Tonight, we are talking about some of those trade negotiations that 
will come forth. The most recent now is being viewed as a huge impact 
on the world's economy. A great percentage of the world's economy will 
be impacted by the TPP, the Trans-Pacific Partnership.
  We have to make certain that it is done correctly, that it is done 
sensitively, that it keeps in mind that the American contribution to 
all of this should provide us an ample opportunity, an equal 
opportunity, to compete for jobs.
  What has happened is that we have had these trade negotiations 
develop well beyond the original dynamics of trade barriers and 
tariffs. They are incorporating far more information and dynamics than 
just those barriers. We may reach to items like collective bargaining 
opportunities or environmental standards or guidelines for public 
health or requirements for public safety.
  If we relinquish some of those hard-fought battles in this country to 
make safer a workplace or to have a product be as safe as possible or 
where we have been sound stewards of the environment or we have offered 
dignity to workers to collectively bargain, to unite as an effort to 
score for better benefits and just remuneration for the work that they 
do, we want to make certain that those standards are not dumbed down, 
that they are not reduced, that the world comply with those given 
opportunities for which decades' worth of sweat equity was poured 
forth.
  Advocacy was echoed in the halls of government to make certain that 
these justified outcomes were fought for and realized and made 
statutorily etched into our government and our laws.
  We do not take this lightly. We take this effort as a serious 
challenge, one that would address some of these hidden impacts that 
aren't often shared well enough with the general public that we serve 
that are represented here in this Chamber.
  It is important for us to understand one of those growing concerns 
happens to be currency manipulation. It is one of those sneak attacks 
that really provides for a grossly unlevel playing field. We are 
discussing a critical aspect of the global economy and trade policy 
that has been ignored for far too long.
  This currency manipulation is causing a lot of concern on both sides 
of the aisle and is now pushing legislators to speak more forcefully. 
When countries manipulate their currency, it makes foreign-produced 
goods all the cheaper. That should signal an alarm.
  It doesn't end there. It also suggests or creates a situation where 
United States exports are less competitive. It doesn't end there 
because, as we lose in that battle, where we are less competitive, it 
then drains our economy by contributing to the downward pressure on 
wages in many sectors of our economy.
  We have seen this tremendous impact in trade deficit that has been 
produced in this country because of failed negotiated contracts and 
because of the impact of currency manipulation.
  Now, I understand that currency manipulation is not something most 
people talk about. It is not easy to conceptualize how devaluation of 
China's yuan or Japan's yen could impact us so severely. It puts 
American jobs in jeopardy. That is why we need to consider this issue 
much more seriously.
  We need to make certain that a structured response to this 
manipulation is part of the negotiations and part of statute from the 
Federal perspective. Millions of jobs, I would suggest, are at stake.
  If a country is going to cheat by devaluating its currency to make 
its products cheaper, it hurts America, and that hurt should not be 
tolerated. It is as simple as that.

[[Page 2148]]

  For anyone that claims to support unfettered free trade, I urge them 
to engage in this issue. Persisting currency manipulation distorts 
markets. It is as simple as that. As long as it is allowed to continue, 
trade cannot be free, trade cannot be fair.
  Now, there is a growing bipartisan consensus that strong and 
enforceable currency rules are needed, needed to ensure a level playing 
field for both the legislative perspective and as part of any new free 
trade agreement. We believe, many of us, that it should be part of 
statutory reform but, indeed, included in those agreements that are 
struck.
  Few actions by foreign governments do more to disrupt free trade and 
harm the United States job market than currency manipulation.
  A wide array of economic think tanks--including the Laffer Center at 
the Pacific Research Institute, the Peterson Institute for 
International Economics, the Economic Policy Institute, and the Center 
for Automotive Research--have all published what are extensive studies 
and commentaries supporting a crackdown on currency manipulation.
  These groups hold varying and diverse views on the benefits of free 
trade, so they may not all be coming from the same perspective, but all 
are united in their sense that trade cannot be free or fair if 
countries are allowed to cheat by manipulating their currencies.
  The Peterson Institute has support indicated for currency as a 
chapter in the Trans-Pacific Partnership. Certainly, the former 
economic adviser to the Vice President has also supported including a 
currency chapter in the Trans-Pacific Partnership.
  The Peterson Institute has estimated that America's trade deficit has 
averaged some $200 billion to $500 billion per year higher as a result 
of the manipulation.

                              {time}  1845

  That is happening from many angles, primarily from forces in China 
and Japan. Let me repeat those stats. $200 billion to $500 billion per 
year is the estimate for our trade deficit coming from some sound think 
tanks as a result of currency manipulation.
  The Peterson Institute also estimates that interventions in currency 
markets by foreign governments have cost United States workers as many 
as 5 million jobs over the last decade. So I believe it speaks to us 
profoundly and should cause us to respond to the challenges of 
protecting jobs, American jobs, through the issues of fairness. This is 
not asking for some unfair competitive advantage. It is simply 
reminding the world that we understand what is happening out there as 
dynamics work against us and that we are going to do what we can to 
inspire fairness in the process.
  The EPI, the Economic Policy Institute, found that ending currency 
manipulation could reduce the United States trade deficit by as much as 
$500 billion within 3 years and create as many as 5.8 million--5.8 
million--American jobs. These are statistics that should not be taken 
lightly. They are reports that should feed our senses and build our 
passion to do what is correct here, to make certain that we inspire the 
sort of reforms to this process and to Federal law that would make for 
a much fairer outcome, a more fair outcome for the American public.
  Certainly there is no greater issue that rests before Congress these 
days than creating the climate that allows for private sector job 
growth. Now, government may not create jobs. That may not be our 
purpose, prime purpose, but we certainly can do all within our power to 
create the sort of climate, the environment that allows for job growth 
to be maximized.
  As we move into this desire to have world trade work as powerfully as 
it can and as fairly as it can for those of us in this country, we need 
to make certain that some of these reforms are embraced, and embraced 
in as enthusiastic a manner and expeditious a process as possible.
  There was a report released just last week by EPI highlighting the 
negative impact that the Trans-Pacific Partnership would have on the 
United States' jobs if currency manipulation is not addressed, and that 
report, dubbed Currency Manipulation and the 896,000 United States Jobs 
Lost Due to the United States-Japan Trade Deficit, contains estimates 
for job displacement for every congressional district. We are making 
certain that all of our colleagues know of this information. These are 
data that are relevant to the people that we represent. These are data 
that challenge us.
  I know that the study found that over 46,000 jobs would be displaced 
in New York State, including 1,800 in the 20th Congressional District 
of New York, my home district. That is due, again, to the massive trade 
deficit that this Nation endures with Japan, a deficit that has been 
fueled primarily by currency manipulation.
  So how do we address currency manipulation? How does it work? To 
identify manipulation, we need first and foremost to look at three 
criteria, criteria that are based on the International Monetary Fund's 
definition.
  First, does the country of concern have large reserves of foreign 
currency, does the country have sustained trade surpluses, and does the 
country continue to buy large amounts of foreign currency?
  Worth repeating. Does the country have large reserves of foreign 
currency, does the country have sustained trade surpluses, and does the 
country continue to buy large amounts of foreign currency?
  Undervalued exchange rates allow the manipulating country to boost 
exports of their products and then put imports from other countries 
that are not cheating at tremendous disadvantage. Floating currencies 
should be self-adjusting based on trade deficits and surpluses. Cheaper 
dollars will lead to more exports and a balancing of the deficit over 
time. It is an ebb and flow relationship, and there is a natural 
tendency for that ebb and flow; but when one enters in a greed factor, 
it can change those results and change them severely. The natural trend 
is not allowed to occur when a country intervenes in that currency 
market.
  Countries like China and Japan have prevented this self-correcting 
process by buying United States currency. This artificially strengthens 
the dollar and keeps us importing relatively cheap goods produced 
abroad.
  We already have a significant trade deficit with Japan, and that is 
very much measured in the automobile industry. Our trade deficit with 
Japan is second only to our trade deficit with China, and the majority 
of that deficit is in the automotive sector.
  Now, if you are to talk to any of our colleagues from Michigan, they 
will tell you about the devastation that has been borne upon, laid upon 
that auto industry in their home State. They have shared with us some 
very painful statistics. Well, the majority of that deficit, as I said, 
is in the automotive sector as it relates to Japan and China.
  Japan, for instance, imports one American car for every 100 Japanese 
cars imported into the United States each year. That is one car, one 
car imported from America into Japan for every 100 Japanese cars that 
are imported into the United States each year. That pattern can't 
continue. That is an easily predictable devastating outcome.
  Ford Motor calculates that the weakened yen of Japan added some 
$6,000 in profit, on average, per car imported from Japan in the years 
2012 to 2013. So if you have that $6,000 advantage built into the sales 
price, where do you think we are going? It is allowing for such a 
devastating impact on the American worker, the autoworker of this 
country. It is unrealistic to have us as a nation to stand silently and 
not echo some order of concern.
  So what can the Congress do? Well, the House of Representatives 
should pass the Currency Reform for Fair Trade Act, and the 
administration should require strong and enforceable currency 
manipulation provisions in the TPP, in the Trans-Pacific Partnership. 
Bipartisan groups in the House and in the United States Senate here in 
Congress are introducing legislation which would use United States 
trade law to fight currency manipulation and provide consequences for 
countries that indeed do cheat.

[[Page 2149]]

  In the 113th Congress, the Currency Reform for Fair Trade Act, of 
which I was cosponsor, would have enabled the Department of Commerce to 
impose countervailing duties to offset the impact of currency 
manipulation. If you want to cheat, you pay. We are not going to stand 
for unfair trade. That bill had 157 bipartisan cosponsors, and 
identical legislation was passed with bipartisan support back in 2010.
  The legislation is identical to the House bill that passed with 
overwhelming bipartisan support in 2010. That bill is consistent with 
the World Trade Organization and its rules. I think that this bill is 
written intelligently to conform to our trade agreement rules by 
considering currency devaluations as an illegal trade subsidy.
  We already have mechanisms for addressing other illegal subsidies, 
but a bill such as that one, which is a start to addressing the 
problem, will not end the practice of currency manipulation. We also 
need to include provisions in our trade agreements. Those provisions 
included in those agreements would provide our trading partners with a 
strong deterrent for manipulating their currency in the first place. We 
also have to make sure that our trade obligations explicitly allow this 
approach to targeting currency manipulation.
  So I believe there are efforts within our grasp that we can work to 
achieve, that the changes and the reforms that we can provide will 
enable us to breathe free and grow and enhance the opportunities of our 
manufacturing sector.
  Now, we think back to the booming economy we had in the 1950s and 
1960s. We think of all the post-World War II growth of this Nation. We 
think of the tethering of the American Dream. We think of the passion 
of immigrants who had come here to climb those ladders of economic 
opportunity. We think of the generations that were strengthened by 
those who made the journey. It was their dream to provide a better life 
for them and their children and their grandchildren, and they saw it 
happening within these mill towns, those epicenters of which I spoke, 
epicenters of invention and innovation, of creative genius that enabled 
us to be the best we could possibly be and where there was hope 
abounding in our communities.
  We can bring back that spirit. We can call for justice, social and 
economic justice as it relates to workers, as it relates to a world 
scene where there is a thought for those in the middle-income 
community, the middle class of America, the working families of 
America, strengthened and empowered because we get it here in 
Washington, where we speak to forces like counterforces, like currency 
manipulation that doesn't give us a fair shot, that creates an unlevel 
playing field, that will cost us dearly in jobs and in the growth of 
our economy.
  So there is much work to be done. We need to make certain that as 
stewards of these agreements we are insisting that our strength be 
heard at the table, that we make certain that we are informed about 
issues like child labor laws, about the rights for collective 
bargaining, about environmental standards, about the need for public 
health and public safety to be addressed in the workplace and in the 
product line that is developed.
  These are standards that are uniquely American at times, that should 
lift the world along with the people of this great country. We don't 
abandon those championing efforts that enabled us to be a stronger 
people, a safer people, building a stronger tomorrow. We don't abandon 
those principles. We build upon them. We share them with the other 
nations of the world.
  As I mentioned to a group of labor individuals in my district 
recently, there are consequences galore if we continue down this path.

                              {time}  1900

  We are selling short the American worker. We are offshoring jobs that 
we can ill afford to ship away.
  But it is beyond that. Not only does the American worker lose her 
job, not only does the American worker lose his hope, we then find 
economies around the world accepting the fact that their citizens are 
working for 75 cents an hour. Where is the justice to any of the 
workers around the world? This is an impact that has a ripple effect 
that pours forth in painful measure with insensitivity and gross, gross 
negative outcomes.
  We can do better than that. We can be a country that will stand tall 
and know from the growth and progress that we have achieved through our 
halls of government, through the efforts of labor and unionized forces 
that came through labor and said, We are better than this. We need to 
share in the wealth of our economy.
  We need to make certain that we respect our labor forces. The 
unionized efforts gave us sound benefits and sound salaries and good 
working conditions, acceptable standards. We are not going to ship that 
away. We are not going to allow for currency manipulation and the 
undoing of the American ideals, to be forsaken for the sake of a factor 
that has taken this global economy and produced these outcomes that are 
grossly unfair.
  When we see a trade deficit in the trillions of dollars, when we 
understand that addressing currency manipulation can undo by hundreds 
of millions of dollars a deficit in a short order of 3 years, we can 
make a difference. We can be a force of change. We can be the voice of 
reason. We need to be that leader at the table.
  Congress needs to be involved, invested in this opportunity. We need 
to make certain that the academics guide us here, that we pay attention 
to the data that are speaking to our senses.
  We are rejecting all for which we fought. We are rejecting all for 
which labor painfully organized and achieved successful outcomes. If 
there is not justice for all in this process, it will not work.
  But the American standard, the American appeal, the American hope 
that has been a beacon to people around the world should be that 
guiding force, should be the noble effort that allows all of us to 
understand that by committing to these issues of social and economic 
justice, we will have strengthened not only the American worker but 
workers around the world. An unlevel playing field simply does not work 
here. And offshoring jobs is the painful, gross neglect of the American 
Dream. The American Dream was one that found people playing by the 
rules, rolling up their sleeves, and expecting to taste success.
  We can still build that aura within the halls of government. We can 
create those standards that determine a fair and just outcome. And we 
can speak soulfully to the people who are counting on us in the given 
communities they call home across this great expanse called the United 
States of America. We have always been that higher standard. We have 
always been the people in search of a better tomorrow. We have always 
been a society indebted to justice.
  Throughout our annals of history, stories replete of us making a 
difference by working our process called government, by making certain 
it empowers the individuals and families of this Nation in a way that 
simply speaks to what is right. We know it is right here.
  There have been a number of folks in this House championing the 
effort of fair trade, talking about the inclusion of Congress in a way 
that allows for amendments and improvements to agreements and certainly 
an outspoken force that speaks to holding fast to those standards that 
speak to the wisdom that guides us, of being fair and respectful to 
those who labor, who labor steadfastly, who ask only to be treated as 
an equal partner in this process.
  It is an honor to represent those voices that speak so profoundly 
well in the workplace, asking for that dignity of work, asking for just 
remuneration for the sweat equity that they pour forth in wanting to 
have just that better step forward for their children and their 
grandchildren as they grow to their tomorrows, filled with hope. We can 
provide hope. We can build change. And we can issue justice if we put 
our mind, heart, and souls to that effort. I suggest we can do it. It 
is within our grasp.

[[Page 2150]]

  With that, Mr. Speaker, I thank you for the opportunity and yield 
back the balance of my time.

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