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Stabenow Testifies on Behalf of Michigan Manufacturers on China's Unfair Trade Practices

Location: Washington, DC

Stabenow Testifies on Behalf of Michigan Manufacturers on China's Unfair Trade Practices

Key Senate committee holds major hearing on U.S.-China Economic Relations

Workers in Michigan and across the U.S. have the expertise and work ethic to compete in international markets, but we will continue to lose jobs and sales until the federal government stops the illegal trade practices of our trading partners, U.S. Senator Debbie Stabenow (D-MI) told the Senate Finance Committee today.

At a hearing focused on economic relations between the U.S and China, Stabenow pointed specifically to China as a nation whose trade violations - currency manipulation and theft of intellectutal property - have cost the U.S. hundreds of thousands of manufacturing jobs. An estimated 51,000 jobs in Michigan alone have been lost to China between 1989 and 2003.

"Our workers can compete with any others in the world if they are assured of a level playing field - a playing field where all of the competitors play by the rules," Stabenow said. "We must stand up for our manufacturers and farmers, and insist that our trading partners play by the rules they agreed to when joining the World Trade Organization."

Currency manipulation - in China's case, artificially valuing its currency below market rates - has had the effect of making Chinese goods artificially cheaper in the U.S. and American products more expensive in China, a price differential that could be as high as 40 percent, she said.

"The impact of this illegal action is clear," Stabenow said. "It gives a distinct advantage to Chinese companies that export into the U.S. and diminishes our ability to export to the Chinese market - China is effectively giving its exporters an illegal subsidy."

Intellectual property theft and counterfeiting are also enormous problems for Michigan manufacturers, Stabenow said. "Counterfeit automotive products not only kill American jobs, but they have the potential to cost American lives, as cheap and shoddy automotive products replace legitimate ones of higher-quality," she said.

In one case of counterfeiting, Stabenow said, a patented $70 woodworking tool, designed and manufactured by a Michigan firm, was copied in China artificially and resold in the U.S. - complete with the Michigan manufacturer's installation instructions and photos - for $10, less than the cost of the raw materials. The company spent the money to win a court ban of the counterfeit product, "but what company can ever be sure that they've achieved victory against this type of illegal behavior if the country of origin - in this case, China - is not going to abide by its obligations under the WTO?"

Stabenow said it was time for the federal government to aggressively address the issue. "Otherwise, we allow our manufacturers to fall victim to two injustices: first at the hands of unfair competitors in Asia and the second to an indifferent federal government," she said.

Stabenow has authored a bill to create the post of Special Trade Prosecutor to crack down on countries like China for violating laws that cost the U.S. manufacturing jobs. Stabenow is also a co-sponsor of two bills focusing on these trade problems. One bill spells out more precisely what actions by foreign governments constitute currency manipulation, and the second authorizes U.S. trade action in response to foreign currency manipulation by China.

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