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Introduction of The American Workers and Manufacturers Support Act

Location: Washington, DC

Introduction of The American Workers and Manufacturers Support Act -- (Extensions of Remarks - April 20, 2004)






Mr. LARSON of Connecticut. Mr. Speaker, many of my colleagues and I have been watching with great interest the nightly news report on Lou Dobbs Tonight entitled "Exporting America." The series has highlighted the disturbing trend of good paying American jobs that are being sent overseas. In the past three years, more than 2.8 million Americans employed in manufacturing have lost their jobs. Because each manufacturing job supports two non-manufacturing positions; that means at least 8.4 million people have been affected, directly or indirectly, because of the loss of American manufacturing to overseas companies. Despite these job losses, over 16 million Americans are still employed in the manufacturing sector. Additionally, manufacturing contributes roughly 17 percent of our nation's gross domestic product, provides 71 percent of our exports, and funds 67 percent of our nation's research and development investment. As these numbers indicate, manufacturing is the backbone of our economy and action must be taken to protect and create jobs here at home and stem the tide of American manufacturing jobs moving overseas.

Current free trade policies have enticed many large corporations and retailers to take

advantage of cheap foreign-made goods. I was dismayed when the Chairman of the President's Council of Economic Advisors, only months ago, stated that companies outsourcing American jobs overseas is a "good thing." While these policies can lead to a temporary boost for a sector of the economy, most notably in the retail sector, in the long run their implications can be detrimental to American workers. I doubt that any Americans who are out of work because their job went overseas believe that outsourcing is a good thing. We must protect the jobs we have and create others to fill the void left by the jobs that have been lost.

An even more dangerous result of these policies is the threat to our national security when vital defense-related products are made in foreign countries. The ever shifting geopolitical landscape could leave the source of critical components of our defense systems in the hands of a nation unsympathetic to the United States. Manufacturers are also major customers of information and communications technology. Many electronics components are now manufactured only outside the United States. For example, the wire industry is nearly nonexistent. If our manufacturing base continues to erode, the effects will be devastating, not only in terms of individual job losses, but also in terms of the ripple effects that will be felt throughout our economy and our national security.

In response to this disturbing trend, I worked with business and labor leaders to craft the American Workers and Manufacturers Support Act. This legislation is an eight-point plan which lays out pragmatic steps designed to secure our manufacturing economic base, protect jobs, and help grow the manufacturing sector here at home.

First, we must end the threat to our national security by strengthening the Buy American Act to ensure that the federal government supports domestic companies and domestic workers by buying American-made goods. The bill would strengthen the existing Act by applying its provisions to the new Department of Homeland Security and by tightening existing waivers. It would also require that information be provided to Congress and to the American people about how often the provisions of this Act are waived by Federal departments and agencies.

Second, we must enforce existing trade agreements. This bill establishes a Congressional Trade Office to provide Congress with independent, nonpartisan, neutral trade expertise and monitor compliance with major, bilateral, regional, and multilateral trade agreements. The Office will also observe and evaluate dispute settlement deliberations and selected trade negotiations.

Third, we must stop the manipulation of currency exchange rates. Several nations have for years intervened aggressively in currency markets to maintain their national currencies at artificially low values relative to the U.S. dollar. The result is the gradual decline of manufacturing in the U.S. and job losses in manufacturing. This bill would give a ninety day deadline for the Administration to negotiate an end to the currency devaluation by countries such as China that severely undervalue their currency. If these bilateral negotiations fail, the legislation requires the President to utilize powers he already possesses under U.S. and international law to file legal action to halt these practices and recover damages for U.S. manufacturers.

Fourth, we must enable American consumers to make informed choices about purchasing American made goods. This bill charges the Department of Commerce with studying the feasibility and impact with regards to costs to manufacturers and consumers of enacting laws requiring all products retailing at more than $15 to state clearly on the labels the percentage of components made in the United States.

Fifth, we must invest American dollars in America. This bill brings the U.S. into compliance with World Trade Organization regulations and protects U.S. manufacturing jobs. It repeals the Foreign Sales Corporation/Extraterritorial Income (FSC/ETI) tax provisions that provide a partial tax exemption for U.S. exports. These provisions have caused the European Union to threaten retaliatory tariffs because the WTO has ruled that these tax exemptions are prohibited export subsidies. The bill also provides transitional relief to companies currently receiving the FSC/ETI benefit, and provides permanent tax relief to make U.S. companies more competitive in the global market, resulting in an increase in U.S. manufacturing and U.S. manufacturing jobs.

Sixth, we need to stop pitting big American manufacturers against small ones. Large manufacturers and retailers know that smaller companies have difficulty competing within the current trade structure, and sometimes they use questionable tactics in trying to obtain favorable prices. One such practice is to place a large contract order to get a favorable price then to cancel the contract after only a portion of the goods are provided. This bill charges the Secretary of Commerce with setting up an investigative unit to look into these practices, establishing guidelines to address abuses and a unit to allow small manufacturers to confidentially report their complaints.

Seventh, we must ensure the flow of qualified manufacturing workers. This bill includes preparation of students for manufacturing jobs under the Advanced Technological Education Program and increases funding for the program. Additionally, it provides funding for the Manufacturing Skills Standards Council, which sets performance standards to certify job skills for manufacturing workers.

Finally, the eighth step is to support America's small manufacturers. This bill creates a new Undersecretary within the Department of Commerce to oversee the new Manufacturing and Technology Administration created by the bill. This office would be tasked with supervising the National Institutes of Standards and Technology; National Technical Information Service; and a new policy analysis office named Office of Manufacturing and Technology Policy. Additionally it would conduct manufacturing and technology policy analysis to improve United States industrial productivity, manufacturing capabilities, and innovation. It would also be tasked with identifying manufacturing and technology needs, problems and opportunities within and across industrial sectors. It would propose and support studies and policy experiments, in cooperation with other federal agencies, to determine the effectiveness of measures for improving United States manufacturing capabilities and productivity. Finally, it would encourage and assist the creation of centers and other joint initiatives by State or local governments, regional organizations, private businesses, institutions of higher education, nonprofit organizations, Federal laboratories to encourage technology transfer, to encourage innovation, and to promote an appropriate climate for investment in technology-related industries.

If our manufacturing base continues to erode, the effects of individual job losses on our economy and national security will be devastating. In conclusion, I urge my colleagues to join me in supporting this legislation.

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