U.S. Senators Debbie Stabenow (D-MI) and Sherrod Brown (D-OH) sent a letter to U.S. Treasury Secretary Henry Paulson expressing disappointment at the Treasury Department's failure to designate China as a currency manipulator in its semiannual report to Congress. Congress gave this authority to the Treasury Department under the Omnibus Trade and Competitiveness Act of 1988.
It is widely accepted that China manipulates its currency by pegging it to the dollar. Best estimates show that currency manipulation amounts to a 40 percent subsidy for China. The United States' ever-expanding trade deficit with China has contributed to the loss of more than 2 million manufacturing jobs in the last six years.
Yesterday, Stabenow and Brown participated in a colloquy on trade on the Senate floor that addressed currency manipulation, Fast Track negotiating authority, which is set to expire at the end of June, and pending free trade agreements with Peru, Panama, Columbia, and Korea. Earlier this week, members of the U.S. House of Representatives took to the House floor to discuss the need for a new direction in U.S. trade policy.
The Senators released the following statements from their colloquy yesterday morning:
"In this country we have lost over three million manufacturing jobs. Three million jobs that people raised their kids on, sent them to college, middle-class families, good jobs, good in incomes with health care, with pensions. These are the jobs that have created the middle class of this country, and that's not rhetoric, that is a fact," Senator Stabenow said.
"Our trade deficit has gone from $38 billion to $800 billion in just a decade and a half. President Bush Senior, said for every billion dollar trade deficit, it costs a country around 13,000 jobs. However, the response of this administration is, let's do more of these trade agreements. We've already have NAFTA, PNTR with China, CAFTA, Singapore, Chile, and Morocco. They want more, one with Peru, one with Panama, one with South Korea. The fact is, this trade policy is the wrong direction for our country," Senator Brown said.