Hearing of the Senate Banking, Housing and Urban Affairs Committee

Federal News Service

HEADLINE: HEARING OF THE SENATE BANKING, HOUSING AND URBAN AFFAIRS COMMITTEE

SUBJECT: TREASURY DEPARTMENT REPORT ON INTERNATIONAL ECONOMIC AND EXCHANGE RATE POLICY

CHAIRED BY: SENATOR RICHARD SHELBY (R-AL)

LOCATION: 106 DIRKSEN SENATE OFFICE BUILDING, WASHINGTON, D.C.

WITNESSES: SECRETARY OF THE TREASURY JOHN SNOW

BODY:
SEN. JACK REED (D-RI): Well, thank you, Mr. Chairman, and thank you, Mr. Secretary. And I think you already realize this is a hearing not about currency but about jobs, particularly manufacturing jobs. And like every one of my colleagues, I've seen a tremendous deterioration in the manufacturing employment sector in my state of Rhode Island. And frankly, Rhode Island many, many years ago was the beginning of the Industrial Revolution, the manufacturing revolution, in this country.

One of the reasons, not the only reason, but a very significant reason is the behavior of China. When China as admitted to the World Trade Organization, it made commitments that it would eliminate trade barriers, open its market to U.S. exporters, but frankly, they haven't lived up entirely to these promises. And one of the major issues, of course, is their continuing policy of pegging the yuan to the dollar, but also in terms of enforcement of intellectual property rights, industrial quotas, export performance conditions, requirements that business use local content. All of these are inimicable to a free trade regime, which all of us would like to see, but we can't close our eyes to the reality in the relationship.

We shouldn't scapegoat China, but we shouldn't give them a pass, either. And I think we have to take steps. And unfortunately, the report today does little to point in the direction of a policy. It might be a diagnosis, but it's certainly not a prescription for what we should do.

We've lost these jobs, and these jobs go right to the heart of our communities, not just economically but socially. Although the Chinese have announced that they're going to buy billions of dollars in anticipation of the visit of their leadership, a one-time shopping spree can't take the place of a systematic, continuous policy that recognizes the reality on both sides of the relationship.

So I hope, as we go forward, administration will craft a policy and not simply give us a diagnosis. Thank you.