Sen. Snowe: U.S. Must Hold China Accountable for Breaking the Rules
Press Release
U.S. Senator Olympia J. Snowe (R-Maine) today voted to move to legislation holding China accountable for unfair trade practices, specifically China's currency manipulation that has undercut U.S. companies' ability to compete on a level playing field. The Currency Exchange Rate Oversight Reform Act contains Senator Snowe's legislation, authored with Sen. Sherrod Brown (D-Ohio), to direct the U.S. Commerce Department to investigate allegations that currency undervaluation provides an illegal subsidy at the expense of American jobs.
Senator Snowe said:
"This legislation is a long time in the making -- far too long if you ask those of us who have been calling on our government -- under the leadership of both Democrats and Republicans -- to hold our foreign competitors accountable when they violate our trade rules. And this day has been far too long in coming for the millions of American workers who are out of work or whose wages have been decimated as a result of our inability to compete with unfairly subsidized Chinese imports. Since Congress first began requiring the Treasury to analyze the exchange rate policies of foreign countries in 1988, China has been cited as a currency manipulator five times -- all occurring between 1992 and 1994. For more than a decade, China has manipulated its exchange rate by pegging the Chinese renminbi to the dollar. As a result, China's currency is estimated to be undervalued by anywhere from 12 to 50 percent.
"This bill uses U.S. trade law to counter the economic harm to U.S. manufacturers caused by currency manipulation and it authorizes new consequences for countries that fail to adopt appropriate policies to eliminate unfair currency undervaluation. Importantly, it will also provide manufacturers hurt by China's trade practices with the tools to respond on behalf of American workers, and it ensures that our government will heed the requests of a wide range of U.S. industries -- such as paper manufacturers in Maine -- to investigate whether currency undervaluation by a government constitutes an illegal subsidy.
"Failure to act is not an option. If one manufacturer is forced to close because we do not combat subsidized imports, that is one less manufacturer able to export and help grow our economy. If there were ever a moment to empower our workforce when it comes to competing in the global economy, that time is now. From Maine to the Midwest, China's currency manipulation has been among the greatest impediments to our manufacturing sector -- and unfortunately the silence of our government when it comes to this issue has become the silence of our factories."
BACKGROUND: In February 2010, Senators Snowe and Brown introduced S.328, the Currency Reform for Fair Trade Act of 2011, legislation that will give the government additional tools to address China's currency manipulation. The key elements of S. 328 are included in the Currency Exchange Rate Oversight Reform Act.
According to recent reports, between 2001, when China joined the World Trade Organization, and 2010, 4.1 million manufacturing jobs were lost in this country -- and 1.9 million of those jobs, or 47 percent, can be directly linked to our growing trade deficit with China. U.S. manufacturing employees, including thousands who live in small towns throughout our great state, are recognized as the most productive workers in the world. These are the types of jobs that should be thriving in a global economy -- but they cannot if foreign producers like those in China are playing with a proverbial stacked deck.
Senator Snowe has worked in Congress and with the Administration to enforce WTO rules and address China's currency exchange rate manipulation. In September of 2010, Snowe testified before the International Trade Commission and made the case that foreign manufacturers in China were illegally selling their products in the U.S. at unfairly subsidized rates. Amazingly, however, the Commerce Department has refused to investigate.
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