Panel 1 Of A Hearing Of The Trade Subcommittee Of The House Ways And Means Committee: Trade With China, Currency, Food Safety

Statement

Panel 1 Of A Hearing Of The Trade Subcommittee Of The House Ways And Means Committee: Trade With China, Currency, Food Safety

REP. BRALEY: Thank you, Mr. Chairman, and thanks to all the members of the committee for allowing me the opportunity to testify here today.

I would ask unanimous consent that my written statement be included as part of the record.

REP. LEVIN: Without objection.

REP. BRALEY: Mr. Chairman, you represent an area that is known as the automotive capital of the world. I represent an area that is known as the tractor capital of the world: Waterloo, Iowa. And back in 1948 when the NBA was founded, there was a franchise in Waterloo called the Waterloo Hawks. And one of the players on that team was someone you know, Johnny Orr, who used to coach at the University of Michigan and later at Iowa State. And at that time there was an NBA franchise in Fort Wayne, Indiana called the Fort Wayne Zollner Pistons.

REP. LEVIN: (Inaudible.)

REP. BRALEY: You've probably of heard of them. And back in 1948, in the post-war era, manufacturing was much different than it is in this country. And the reason why the NBA changed and the reason why there aren't franchises in Fort Wayne or Waterloo anymore is because the rules of the game changed. And when China was admitted to the WTO, the rules were supposed to change for them in terms of how they conducted their trade policies.

One of the things I'd like to start with is this summary that I put together showing the trade imbalance with China that was taken from the foreign trade statistics of the U.S. Census Bureau. And Mr. Kind, I believe if you look at this summary, it pretty much tracks your history in Congress in terms of your tenure. And it shows how from 1997 our trade deficit skyrocketed from $49 billion to last year when it was $232 billion.

And one of the things that happened as a result of this burgeoning trade imbalance is that the U.S.-China Economic and Security Review Commission was established to monitor that trade imbalance and report back to Congress. And some alarming things have happened in the last three years that have been noted by that commission.

On January 11th of 2005, they released a study that documented the negative impact of our U.S. trade deficit with China. And they noted in that report that 1.5 million jobs were lost to lower wage Chinese competition between 1989 and 2003. And during that time, our trade deficit grew 20 fold. They also noted that the assumptions we built our trade relationship with China on have proven to be a house of cards.

Last year, during its annual report to Congress, the 2006 report, the same commission talked about the U.S.-China trade relationship and noted the problems, including currency manipulation, accounting integrity, dispute resolution problems and fair trade, and the need for criminal penalties for intellectual property rights violations. More importantly, in chapter four, there was a case study of the automotive industry that illustrated the challenges to U.S. manufacturing and the U.S. defense industrial base, and it was recommended that all U.S. Department of Defense -- be required to trace the supply chains of components of critical weapon systems in its recommendations to Congress.

Just this year, on June 1st, in its 2007 report to Congress, the U.S.-China Economic and Security Review Commission noted that five of the eight factors that are major drivers of China's competitive advantage are considered unfair trading practices, including undervalued currency, counterfeiting and piracy, export industry subsidies, and lax health, safety, and environmental regulations that clearly violate China's WTO commitments regarding workers' rights, market access, currency manipulation, subsidies, and protection of U.S. intellectual property rights.

The reason I'm here is to voice my strong support for the two bills we've been talking about: H.R. 1229, which I was proud to co- sponsor, and H.R. 2942, which I was also proud to co-sponsor. It's time for us to level the playing field and bring China into compliance with its international trading obligations and require our administration officials to do their job to provide a level playing field by insisting upon enforcement of the rules of the game.

Thank you for allowing me to be here.

Source