WASHINGTON - The U.S. Constitution empowers Congress "to regulate Commerce with foreign Nations." Yet House Republican leaders have so far pursued zero legislative proposals to confront China’s trade-distorting policies, including a bipartisan measure dealing with China’s manipulation of its currency. Ways and Means Ranking Member Sander Levin today recommended a package of legislative proposals that have been put forward by Democrats this year, highlighted by the Currency Reform for Fair Trade Act.
“Let us remember that the Constitution gives Congress exclusive power over foreign trade. That means Congress must act to help end a variety of China's predatory trade practices," Ranking Member Levin said at today’s Ways and Means hearing on the U.S.-China economic relationship. “The American people expect us to fight for them. They don’t want us to take a hands-off approach to American competitiveness. It is time to act."
PACKAGE OF LEGISLATIVE PROPOSALS RELATED TO TRADE WITH CHINA
Currency Reform for Fair Trade Act (H.R. 639): The bill would eliminate the reason that the Department of Commerce has given for not treating currency undervaluation as a subsidy that can be subject to countervailing import duties under existing countervailing duty laws. The bill passed the House last September by a vote of 348 to 79, with strong majorities of both parties voting in favor. The bill currently has 230 co-sponsors, including 62 Republicans. The Chinese currency is estimated to be 28.5 percent undervalued today, and currency misalignment is believed to cost the United States at least one million jobs (Bergsten, Peterson Institute).
Appropriations for China Enforcement: USTR Kirk has stated that USTR is “woefully short" on resources to investigate China’s industrial policies. In May, 35 Democratic Members wrote to the Appropriations Committee requesting an additional $3.2 million to develop and implement a robust strategy to help rebalance our trading relationship with China. The Members noted the unique enforcement challenges that China presents, such as the lack of transparency and the fact that U.S. companies are often reluctant to assist in the development of a case, fearing retaliation.
Trade Enforcement Priorities Act (H.R. 1518, “Super 301"): Super 301 legislation requires USTR to review trade expansion priorities and identify priority foreign country trade practices the elimination of which is likely to have the most significant potential to increase U.S. exports. It also requires negotiations with countries engaging in such practices and authorizes the initiation of Section 301 investigations (which can lead to a WTO case) in some circumstances. Super 301 was first signed into law by President Reagan in 1988 and then renewed by executive orders under President Clinton. It was allowed to lapse in the Bush Administration.
Countering Evasion of Trade Remedy Laws (H.R. 3057): Foreign companies often employ fraudulent tactics to evade U.S. antidumping and countervailing duties, including misrepresenting the country of origin of imports. Such evasion harms U.S. businesses and workers who have successfully petitioned for relief from the illegal trade practices that the antidumping and countervailing duties are designed to neutralize. The Enforcing Orders and Reducing Customs Evasion Act of 2011 (H.R. 3057, “ENFORCE Act") would counter such evasion by requiring Customs to expeditiously investigate and act against such practices, including by providing Customs authority to collect unpaid duties and assess penalties.
Buy American Improvement Act of 2011 (H.R. 2722): The Buy American Act requires federal agencies to purchase goods manufactured in the United States, “substantially all" from inputs manufactured in the U.S., unless one of several waivers is granted (e.g., purchase would be inconsistent with the “public interest," the cost would be “unreasonable," or a U.S.-made product is “not available in commercial quantities"). There have been concerns that the waivers have been abused, to the benefit of Chinese suppliers. H.R. 2722 would require the Office of Federal Procurement Policy to, among other things: (1) standardize how agencies determine “public interest"; (2) make publicly available information about waivers; and (3) develop rules for evaluating the percentage of domestic content. It also strengthens the Buy American Act by, for example, not finding the cost of a U.S. bid to be “unreasonable" unless it would increase the cost of the overall project by more than 25 percent. The bill includes a requirement that it be applied in a manner consistent with WTO obligations.
