Department of State, Foreign Operations, and Related Programs Appropriations Act, 2010--Motion to Proceed

Floor Speech

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Mr. SCHUMER. Madam President, I am pleased to join my colleague, Senator Webb, in discussing serious concerns with Chinese economic and foreign policies and their impact on the United States, U.S. companies, U.S. workers, and U.S. citizens.

Earlier, we were supposed to speak together, but the vicissitudes of the floor broke us up. Earlier today, my esteemed and erudite colleague, Senator Webb, gave an excellent address, which I hope my colleagues will read, about how China is simply taking advantage in the foreign policy area. They are pursuing policies that just move forward without any concern for the world community, for peace, for comity. It seems China is first, second, and third.

Unfortunately, they are doing the same thing in the economics sphere. I have been working with colleagues such as Senators Stabenow, Brown, and Graham to try and reverse this situation.

I rise to speak about what many of us consider the biggest sticking point in U.S.-Chinese relations: Chinese overt and continuous manipulation of its currency to gain a trade advantage over its trading partners.

The Economic Policy Institute estimates that 2.4 million American jobs were lost or displaced in manufacturing and other trade-related industries between 2001 and 2008 as a result of increased trade with China and the Chinese Government's manipulation of currency. New York has suffered some of the biggest losses with over 140,000 jobs lost or workers displaced over the past 10 years.

Accession to the WTO was supposed to bring China's policies in line with global trade rules meant to ensure free but fair trade. Instead, China has flouted those rules to spur its own economy and export-oriented growth at the expense of its trading partners, including the United States. Clearly, our relationship in the economics sphere, as well as the foreign policy sphere and diplomatic sphere, with China needs fundamental change.

I say that loudly and clearly to the Chinese because they seem to think we are patsies. Past policies might give some corroboration to that view. Let me explain.

Six years ago, Senator Graham and I came up with the idea of doing something about manipulation of currency. At first everyone said: Oh, no, this is not a problem. There were editorials in both the Wall Street Journal and New York Times that said it is OK for China to peg its currency. We were attacked from the far right and the far left and many others.

Now, at least we have made some progress. Everyone admits it is a problem. Now that we have consensus--quite broad consensus--that this is a problem, this is wrong, this is unfair, the fundamental question hangs out there: Who is going to fix this problem and how?

The administration continues--this administration, and I say that as someone who is a supporter, who continues to pin its hopes on yet more talking. This despite the fact that years of meetings and discussions with this administration and the previous administration have repeatedly failed to produce any lasting, meaningful results.

It has been 3 months since China announced it would allow its currency to appreciate for the first time since the middle of 2008. The RMB has risen less than 2 percent against the dollar, most of that appreciation taking place in the last 2 weeks.

President Obama met with Chinese Premier Wen last week to urge quicker
evaluation of his country's currency. He got nothing, nothing--a big goose egg--for his efforts. It is not his fault; it is the fault of the Chinese. But when are we going to change things?

According to news reports, Premier Wen gave a standard response about gradual reform. The upcoming G20 summit in Seoul looks similarly devoid of possible progress on this issue. News reports suggest that none of the other countries are willing to push China on this issue.

Each time I have pushed the administration to take a tougher stance against China's manipulation of currency; each time they have vowed to do so. It is plain and simple: It is not working. China is merely pretending to take significant steps on its currency. This sucker's game is never going to stop unless we finally call their bluff.

China's mercantilist policies continue to undermine the health of many U.S. industries that inject billions of dollars into the U.S. economy and employ hundreds of thousands, millions of American workers. We have to do something about it--something real.

Last week, the House Ways and Means Committee voted out a bill that clarifies countervailing duties can be imposed to offset the effect of undervalued currency. I applaud Chairman Levin for taking a concrete step toward addressing the persistent imbalance created by China's undervalued currency. Effective enforcement of our trade laws is one tool the administration can and should use to counter China's mercantilist currency policies.

But the administration could use more than one ace up its sleeve. And that is what my bill, introduced with Senators Stabenow, Graham, Brown, Brownback, Webb, Snowe, and others--bipartisan, across the political spectrum--would provide.

The bill gives the administration additional tools to use if countries fail to adopt appropriate policies to eliminate currency misalignment and includes tools, including the use of the countervailing duty law, to address the impact of currency misalignment on U.S. industries.

I call on the administration to support our legislation to address China's mercantilistic exchange rate policies. We must stand up for American manufacturers, American workers, and American jobs. We have to prevent the flow of billions of dollars out of our country--wealth we will never recover--every quarter as long as the Chinese continue this policy.

Critics of our bill say it would start a trade war with China, but that is not right because American companies are already fighting a war for survival in China--battling market access limitations, intellectual property theft, indigenous innovation policies, and unfair competition from heavily subsidized domestic State-owned enterprises.

When are we going to learn?

Critics of our bill say it will not solve the trade deficit with China. We have never claimed it will totally solve the deficit, that is for sure. The bill is about fair trade. The bill is about a ceramics manufacturer in upstate New York that has developed a great new product that can clean the air as it goes through our new generator turbines. But China is stealing the product and is now going to sell it back to the United States at a 30-percent advantage. You can't even measure the loss we face because of China's unfair policies on currency.

Yes, critics of our bill have said it will not solve the trade deficit, but as I said, this has never been the claim. It will reduce the trade deficit, without doubt. It will keep wealth in the United States, it will keep American jobs, and it will restore some equilibrium to the American economy and the world economy.

Other critics have said China could retaliate by selling some of the trillions of dollars of Treasurys they currently hold, but we know this will not happen. China is not going to cut off its nose to spite its face. Its major wealth asset they are going to devalue? Hello, as my kids might have said when they were younger.

We must take a decisive step against China's currency manipulation and other economically injurious behavior. We have no choice but to defend and protect U.S. jobs and the U.S. economy unless and until China starts behaving like the international, law-abiding, global, emerging power it seems to be recognized as. Once and for all I say to those in the ivory towers who love to look down upon us but who don't look at the facts, the issue is not U.S. protectionism; the issue is China's flouting the rules of free trade in almost every sphere and never budging unless they are pushed to.

This is one reason why when the Senate reconvenes later this year, my colleagues and I intend to move forward with the legislation to provide specific consequences for countries that fail to adopt appropriate policies to eliminate currency misalignment and give the administration the additional tools it needs to address the impact of currency misalignment on U.S. industries.

I say to those at the other end of Pennsylvania Avenue, as well as in Beijing, this issue cannot wait for another year. It cannot wait for another new Congress. I am confident this bill will pass the Senate with overwhelming support.

Let me conclude by noting that over the past 6 years, my colleagues and I have been sending a message to the Chinese Government about their exchange rate policies and other WTO-inconsistent behavior, but apparently they refuse to listen. Ultimately, if you refuse to play by the same rules as everyone else, we will hold you accountable. Chinese currency manipulation would be unacceptable even in good economic times, but at almost 10 percent unemployment, we can't stand for it. There is no bigger step we can take than to confront China's currency manipulation.

Praise God, this is not a Democratic or Republican issue. We have broad bipartisan cosponsorship of our legislation. No one is seeking to gain political advantage. We are simply seeking to restore economic fairness. Every single one of us has manufacturers that are struggling to compete at home and abroad with Chinese exports with a built-in 20- to 40-percent price advantage. This is not about bashing China; it is about defending the United States before it is too late--before the loss of jobs and wealth that flows out of this country is almost irreparable. I call on my colleagues to join in the defense.

I yield the floor, and I suggest the absence of a quorum.

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