Schumer to Lead Bipartisan Senate Delegation Trip to China in Latest Effort to Address its Unfair Trade Policies

SCHUMER TO LEAD BIPARTISAN SENATE DELEGATION TRIP TO CHINA IN LATEST EFFORT TO ADDRESS ITS UNFAIR TRADE POLICIES

Schumer's Bipartisan Bill Imposes a Temporary Across The Board Tariff on Chinese Imports Unless China Revalues Currency

Trip Comes As China President Hu Jintao Makes First Ever Visit to United States In Four Weeks

Schumer to Detail Manufacturing Job Loss For Each County; Capital Region has lost approx. 8,900 manufacturing jobs; Central NY 11,500; Rochester/Finger Lakes 30,600; Hudson Valley 12,700; North Country 5,400; Southern Tier 10,700; Western NY 24,800

In light of a loss of over 104,000 manufacturing jobs across upstate New York over the past five years, U.S. Senator Charles E. Schumer announced he will be leading a bipartisan delegation of Senators on a trip to China to meet with senior Chinese officials about China's continued currency manipulation and other trade issues. Schumer, and Senators Lindsay Graham (R-SC) and Tom Coburn (R-OK) will visit with Chinese government, business, and security leaders from March 19 to 26.

"New York workers can compete and win on a world stage, but only if there's a level playing field," Schumer said. "New York companies know first-hand how China's unfair trade practices are causing devastating job losses here in the United States. Our trip to China comes at a critical time - we have to get China to play by the rules and I am hopeful that progress can be made when we meet face to face with high-level government and economic officials in Beijing and business leaders in Shanghai."

Schumer will focus on three different issues throughout his trip. At their first stop in Beijing, Schumer, Graham and Coburn will meet with government leaders to push them to stop China's currency manipulation and allow the yuan to appreciate. Because China has been slow to allow its currency to appreciate, the global trading system is thrown out of balance, and in 2005 the U.S. has a record trade deficit with China. In Shanghai, Schumer and others will meet with leaders of the financial industry and with executives from New York companies with operations in China, including Kodak and Citibank. While in Hong Kong, Schumer will tour one of the world's largest and busiest international ports to compare port security measures used on-site with those employed in the United States.

Schumer released a new study today showing that tens of thousands of upstate New York jobs were lost between January 2001 and January 2006. Specifically, Schumer's report found that:

• Over the last four years, approximately 8,900 manufacturing jobs in the Capital Region have been lost;
• Over the last four years, approximately 11,500 manufacturing jobs in Central New York have been lost;
• Over the last four years, approximately 30,600 manufacturing jobs in Rochester/Finger Lakes area have been lost;
• Over the last four years, approximately 12,700 manufacturing jobs in the Hudson Valley have been lost;
• Over the last four years, approximately 5,400 manufacturing jobs in the North Country have been lost;
• Over the last four years, approximately 10,700 manufacturing jobs in the Southern Tier have been lost;
• Over the last four years, approximately 24,800 manufacturing jobs in Western New York have been lost.

Schumer today discussed specific companies throughout upstate New York that demonstrate China's impact on American jobs, including the Marietta Corporation, headquartered in Cortland; Oneida Ltd., Buffalo; Precision Grinding and Manufacturing, Rochester; MT Picture Display, Elmira; and Prismatic Dyeing and Finishing in Newburgh, Carrier Corporation in Syracuse, Cathedral Candle Company, and Crucible Steel in Syracuse.

The Schumer-Graham China Free Trade received 67 votes on a procedural vote last April and is scheduled for an up-or-down vote before March 31. The bill allows for a 180-day negotiation period between the United States and China on currency revaluation; if the negotiations are not successful, a temporary across the board tariff of 27.5% will be applied to all Chinese products entering the United States. If the President certifies to Congress within 180 days of enactment that China has made a good-faith effort to revalue its currency upward, he may delay the imposition of the tariffs for an additional 180 days. If at the end of that 180-day period the President determines that China has developed and started actual implementation of a plan to revalue its currency, the President may delay imposition of the tariffs for an additional 12 months.

Because China continues to intervene in the currency market to prevent the yuan from appreciating, despite its promise to allow market forces to work, the trade deficit with China rises every month, with no end in sight. Last year, the U.S. trade deficit with China exceeded $200 billion, up from $162 billion in 2004. This was an all-time record for a trade deficit with any single country. Our trade deficit with China represents more than one-quarter of our national trade deficit, which grew by 14 percent last year, to a record $726 billion. Looking at the data sector-by-sector, the rise in the trade deficit has been even more severe. For example, in computers and mechanical goods, the annual deficit with China has tripled since 2002; in electrical machinery, equipment, and parts, it has doubled since 2003; and in textiles and apparel, it has more than tripled since 2000.

Historically, the yuan -- sometimes known as renminbi -- had been generally pegged to the U.S. dollar since 1994. Last July, after having been fixed at 8.28 Yuan to the dollar for more than a decade, China allowed the yuan to appreciate by 2.1 percent and said that they would allow market forces to dictate the yuan's future rise. They have also purportedly taken steps since then to allow appreciation to continue at a more rapid pace. Since July, however, the yuan has appreciated less than one percent, and economists estimate that it is still undervalued by between 15 and 40 percent. This has a serious impact on U.S. manufacturing because it creates a huge built-in price advantage for Chinese imports - a differential that dwarfs any effect from lower labor costs in China, since productivity here is so much higher. In fact, the Michigan's Manufacturing Technology Center estimated that all the competitive advantage a $10 million manufacturing plant in China has over $10 million plant in the U.S. would be erased by a 30 percent currency revaluation.

http://schumer.senate.gov/SchumerWebsite/pressroom/press_releases/2006/PR100.Upstate%20China.031506.html