American exports to China have been growing, and we need that export growth to create American jobs. At the same time:
* China exports four times as much as the United States exports to China
* China’s exports increasingly compete in key areas with American products; and
* China continues to erect barriers to our exports.
The current relationship is imbalanced, unfair, and unsustainable.
This trade deficit contributes to the jobs deficit in America, and the American people want Congress to take action to address it.
For many years now the economic relationship between our two large economies was built on a Chinese economy structured on its export platform overwhelming the role and importance of domestic Chinese consumption, with the U.S. economy significantly built on its role as the major consumption market for Chinese products.
Sensing some of the perils in that economic structure, a decade ago when China entered the WTO, some of us in Congress understood that inclusion of a major non-market economy into a rules-based trading system presented unprecedented challenges. To meet those challenges, we fought for inclusion of tools to strengthen our hand in ensuring that China played by the rules.
Unfortunately, the Bush Administration and the Republican Congress made clear early on they preferred a “hands off" approach to China.
That was reflected in acquiescing in China's making a mockery out of the special provision provided for in China's WTO accession for an annual review of whether China was meeting its obligations.
Another vivid example was the failure to use the safeguard against surges in Chinese imports that harm U.S. industries and workers. On four occasions, the ITC recommended relief. On all four occasions, the Bush Administration refused.
Thousands of American jobs were lost. Knowing the Bush Administration preferred a “hands off" approach helped embolden China to continue trade distorting practices that target our market, our companies and our workers.
Thankfully, the Obama Administration resurrected the 421 safeguard in the tires case. The Administration is trying to turn the ship in the right direction. But the process is too slow, and there is still too much resistance in Congress and elsewhere.
The American people expect their representatives to actively manage this trading relationship. They expect us to fight for a level playing field for American companies and workers. So I appreciate Chairman Camp’s interest in hearing about the Administration’s plans at today’s hearing, but 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.
One of them is China's currency manipulation.
House Democrats insist on action because it matters. Fred Bergsten recently described China’s currency policy as “by far the largest protectionist measure adopted by any country since the Second World War - and probably in all of history."
He estimated that eliminating the misalignment would “produce at least a million good jobs, mainly in manufacturing."
In recent years, some of our Republican colleagues have come to agree about the seriousness of this problem. And, last fall, the House passed its currency bill with strong majorities of both parties voting in favor (348 to 79) - including myself and Chairman Camp. Chairman Camp and other Committee Republicans agreed with us that substantial amendments made the bill, on its face, consistent with our international obligations.
The Senate has now followed the House by passing legislation to address this problem. Now it is the House’s turn to act by once again passing its bill, the Currency Reform for Fair Trade Act, which is co-sponsored by a majority of this chamber- 230 Members.
Because currency is not China’s only predatory and trade-distorting policy, that cannot be an excuse for refusal to act on it. The House leadership must stop using that excuse.
Nor does acting on it mean not acting on other key issues: intellectual property rights, indigenous innovation, trade-distorting subsidies, discriminatory product standards, among others.
But it is alarming how difficult it is to move beyond rhetorical support to bipartisan action.
That is why I and 34 other Democratic Members this year sought an additional $3.2 million for USTR’s China enforcement. Unfortunately, my Republican colleagues were unwilling to join that request.
Last week, one industry - solar panel producers - decided they could no longer wait for us to stand up for them, and took action on their own. Some will now decry that action as protectionist, futile, or anti-consumer. I call it anti-protectionist, standing up for American workers and our future.
This Committee should consider other trade-related legislation, and for the record there has been filed a package of legislative proposals. (In addition to the currency bill and a request for additional appropriations, the package includes reinstituting the so-called “Super 301" enforcement mechanism; a bipartisan bill to address antidumping and countervailing duty evasion; and a bill to strengthen reciprocity in government procurement.)
In short, 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.
