Foreign Affairs Authorization Act, Fiscal Years 2006 and 2007

FOREIGN AFFAIRS AUTHORIZATION ACT, FISCAL YEARS 2006 and 2007 -- (Senate - April 06, 2005)

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Mr. SCHUMER. No time limit, but we will try to keep it to 40 minutes. Great.

I rise in strong support of this amendment of which my friend from Kentucky is a cosponsor. The lead sponsor of this legislation is Senator Graham as well as myself. What this legislation does is simple. It says to the Chinese, enough already. It says to the Chinese that their unfair trade policies have got to end. It says to the Chinese, this is a shot across your bow. Reform because if you don't, there are going to be dramatic consequences throughout the world, in our country, and in your country as well.

The bottom line is very simple: The Chinese have enjoyed a huge trade surplus with the United States, as this chart shows. Every year it gets larger and larger and larger. Admittedly, some of that trade surplus is due to the rules of free trade. But much of that trade surplus is because the Chinese don't play fairly. They don't let our goods into their country. I can tell you of company after company in New York that cannot sell goods in China or can only sell the goods under certain conditions that make it impossible for them to sell them.

The Chinese make no effort to prevent the ripping off of our intellectual property. These are our crown jewels, the great creativity, the great entrepreneurialness of the American business community that is taken, and they shrug their shoulders. And worst of all, the Chinese, despite the fact that they have tremendous advantages by the rules of free trade, pile on unfair rules that violate free trade.

At the top of that list is the fact that the Chinese peg their currency abnormally low so that their exports get a 27-percent advantage in the United States; our imports get a 27-percent disadvantage when sold in China. Every tenet of free trade, if you believe in it, says they should not peg their currency.

Senator Graham and I have foreborn. We were asked by the administration last year: Let us negotiate. I agreed. Negotiating would be better. But nothing happened. The Chinese give lipservice and don't change their trade policies a jot.

What does this mean for America? It means a huge job loss.

We have suffered dramatically in manufacturing jobs, and now service jobs and other jobs. It means we have a huge trade deficit. It means the dollar sinks to abysmally low levels, threatening our wealth. It creates chaos in the whole world trading system. The euro and the yen bear the pressure of the Chinese currency evaluation against the dollar.

We are fed up. This is a measure that should not have to be on this floor. The Chinese should play by the rules once and for all. How can we stand by as millions of American workers lose their jobs, as thousands of American companies cannot compete fairly, as our country as a whole has wealth drained from it?

The U.S.-China Commission, set up by this and the other body to try to bring fair trade to China, believes this is the best way to go. The list of manufacturers, business leaders, and labor leaders who support this legislation is long and large. It is a bipartisan amendment. Senator Graham and I have endeavored to pick up equal amounts of support from each side of the aisle. No one seeks political advantage. What we seek, rather, is fairness--fairness in trade, not in the sense of saying we don't want free trade, but in the sense of playing by the rules.

The Chinese do not play by the rules. We have talked and talked and talked, as a nation, to them, with other nations of the world. We have talked and talked to the Chinese until we are blue in the face. The time for action is now. If not now, when? If not us, who? Millions of American workers, thousands of American businesses, look to us to try to set things right. Today, by passing the Schumer-Graham amendment, we can do that. My guess is this would not have to become law. As soon as it passes this body, the Chinese will actually start to negotiate in earnest. But as long as they think all we do is wield words and do nothing to prevent these practices from continuing year after year after year, they will not budge. So it has come to this.

This amendment is probably one of the most important amendments we will vote on this year in this session of the Senate. I urge my colleagues to study it, to not put off the hour of decision, and to support the Schumer-Graham amendment.

I yield the floor and reserve the remainder of my time.

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Mr. SCHUMER. Mr. President, I would like a followup to some of the comments the Senator from South Carolina has made in reference to our legislation.

First, I will mention the cosponsors of this bill, in addition to Senator Graham and myself, as well as Senator Bunning. They are: Senator Reid, the minority leader, Senator Bayh, Senator Dodd, Senator Burr, Senator DeWine, Senator Stabenow, Senator Mikulski, Senator Johnson, Senator Kohl, and Senator Feingold, and there are others as well. Senator Dole I know is a cosponsor as well on the main bill. Now she is added to this amendment as well.

Mr. President, we have asked over and over again those who have said, Don't do this amendment, we know your intention is good, but don't do it, we have asked them over and over, What do we do? Secretary Snow called Senator Graham and me and asked us not to do the amendment, give them a chance to negotiate with the Chinese. That was over a year ago.

You may recall before he even set foot in China, as his plane was in the air, the Chinese Government announced: Do not even try to negotiate on this; we are not changing. We are going to keep pegging our currency--which devalues our currency.

I sat down with a group of leading New York business people. It was at the invitation of one of them who gathered the group of very bright men in an effort to persuade me not to be for this amendment. After an hour and a half, they all agreed it was the right thing to do because we made the argument to them that day that if you believe in free trade, you cannot have one of the largest trading countries abjectly violating the rules. It does not work. It does not work for China, it does not work for America, and it does not work for the rest of the world.

If anyone doubts that the Chinese really play fair, let me mention one little story, and this is the kind of thing that drives us crazy. There is a company in Cortland, NY, called Marietta. Cortland has had tough times. It is an industrial town. Smith Corona used to make typewriters there. It obviously does not do that anymore. Buckbee-Mears had a big ball bearing plant, and that closed. The one saving grace of Cortland was Marietta, which kept growing.

Marietta makes a product we all use. They are the manufacturer of the little soaps and little shampoos that you get when you go to hotels and motels. The way Marietta gets its business, the chairman told me, is that they go to the big hotel companies, such as Hilton, and they say: You pick the color of the soap and the smell of the soap, and we will make sure it is in every room. That is how they have Hilton and other big companies as their customers.

Only one country does not allow Marietta to import its soap and its shampoo--China. When the president called me and I visited the plant up in Cortland, NY, 30 miles south of Syracuse, he told me that the Chinese now do their own business in China. They are using that protected market in China to compete with Marietta now in Southeast Asia, in Europe, and soon in America.

I said: Why don't you file with the WTO?

He said: I will get an answer in about 8 years, and I will be out of business.

Mr. President, I say to my colleagues, I could not agree more with what Senator Graham said. We must do something. This is the best thing to do. It is certainly a lot better than what we have been doing over the last 2 years, which is absolutely nothing.

I urge, on behalf of free trade, on behalf of the world system that really works, and on behalf of saying to countries, You have to play by the rules to gain the benefits, you should not have a $162 billion trade surplus and not play by the rules, I urge them to support the amendment on which Senator Graham and I have worked so long and hard.

I yield the floor.

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Mr. SCHUMER. Mr. President, an amendment just passed without notice to any of us that involves a dispute about a helicopter between New York and Connecticut. I did not know of that amendment. Neither did Senator Clinton. Neither did anybody else. So I have to object to this until I see what it is. It was offered by my good friend from Connecticut. I will serve notice, I will hold up this bill and sit here until we deal with this in a fair way. This was a sneak attack. We knew nothing about it. It was not debated. And it is not the right way to do business around here.

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