Rahall Calls on President to Toughen Trade Policies with China

HNN Staff

WASHINGTON, DC – U. S. Rep. Nick Rahall (D – W.Va.) Tuesday joined a bipartisan group of lawmakers calling on President Obama to toughen his Administration’s stand against China’s illegal trade policies. 

“I believe in free trade, as long as it is fair trade,” said Rahall.  “When China routinely and purposely manipulates its currency, and dumps steel on our shores, it hurts our steelworkers and coal miners, undercuts our American manufacturers, and costs us jobs.”

In two letters to President Obama, who is meeting this week with China’s President Hu Jintao, Rahall urged the Administration to stand firm in protecting America’s manufacturing sector.  A recent study by the Economic Policy Institute found that trade deficits between the United States and China have cost West Virginia’s Third Congressional District almost 2,000 jobs.

In their letters, Rahall and his colleagues in Congress underscored the illegal and illicit subsidies of the Chinese government for its paper, steel, and energy sectors, noting that those policies are harming the United States.  Citing Chinese policies that violate the commitments made when China joined the World Trade Organization (WTO) in 2001, the lawmakers asked President Obama to impress upon China’s leader that “America’s patience is near an end….”

“West Virginians can compete and win in a global economy if they have a level playing field, but the predatory, protectionist, and illegal policies long in place in China have tilted the field against us.  I will continue to fight to strengthen America’s hand at the trade negotiating table and ensure greater security for American jobs,” said Rahall.

Copies of signed letters are attached; and below is text of each letter sent to the President:

President Barack Obama

The White House

1600 Pennsylvania Ave.

Washington, D.C. 20500

Dear President Obama:

In your upcoming meetings with Chinese President Hu Jintao, we know that you will express concerns about China’s persistent violation of international trade law.  It is vital, however, to impress upon President Hu that America’s patience is near an end and that we can no longer afford to tolerate China’s disregard for the binding commitments they agreed to as part of their accession to the World Trade Organization in 2001.  These standards are in place to ensure that countries do not illegally advantage their economies at the expense of others, and China’s unwillingness to play by the rules is unfairly shuttering U.S. businesses and putting Americans out of work.  Ten years is more than enough time for China to have implemented its WTO commitments.

Numerous economic policies in China violate their WTO commitments, and all of them harm U.S. businesses and employment.  Its currency is manipulated by as much as 40 percent, and its low value helps to China to maintain its status as the world’s biggest exporter.  Its paper sector benefits from illegal subsidies that have allowed the industry – which lacks natural forest reserves and a competitive advantage – to become the world’s largest paper producer.  China’s green energy companies also enjoy illicit subsidies, as well as interest-free, government loans, at the direct expense of U.S. competitors.  Their limit on the exportation of rare earth materials puts U.S. high-tech companies at a severe disadvantage.  And widely applied technology transfer requirements mean U.S. companies doing business in China often have to share their research and development in order to operate there, only to face competition down the road from Chinese companies using the very same U.S.-developed technology.

These, alongside a long list of other WTO violations, harm our workers by putting U.S. companies out of business and impeding our economic recovery efforts.  We applaud your Administration’s effort to take enforcement action on some of these violations.  But the problem with China cannot be solved by a piecemeal enforcement approach.  It is no coincidence that out trade deficit with China has nearly tripled since they joined the WTO.   Nor is it a coincidence that employment in our manufacturing sector has declined by more than 25% in the same period.  Achieving the goal of your National Export Initiative of doubling U.S. exports is impossible without addressing China’s predatory, protectionist, and illegal policies that not only limit our access to their market, but also limit our opportunities in other markets around the globe.

The USTR report issued last month on China’s WTO compliance confirms that getting China to live up to its WTO commitments is one of the “critical challenges facing the United States.”  We could not agree more.  Ensuring that China abides by international trade laws is imperative for the vitality of our nation’s economy and for the viability of American businesses.  We believe President Hu should hear this message in no uncertain terms.

The President

The White House

1600 Pennsylvania Avenue, N.W.

Washington, D.C. 20500

Dear Mr. President:

When you meet with Chinese President Hu Jintao, we urge you to make clear on behalf of the American steel industry that China’s illegal trade practices will no longer be tolerated. As members of the Congressional Steel Caucus, we ask that your discussions include China’s continued violations of trade law — such as dumping of steel pipe and plate, renewable energy product subsidies, and currency manipulation — because they are decimating the ability of the American steel industry to compete on a level playing field.

It is estimated that China is artificially devaluing its currency by as much as 40 percent, giving its own exports a government subsidy and in effect taxing American-made imports. This policy costs the U.S. upwards of 2.5 million manufacturing jobs and a staggering trade deficit of as much as $283 billion. Last June, China announced they would allow their currency to appreciate, but since then, they have restricted the Yuan’s growth to a paltry and unacceptable 3.1 percent. The time has come to insist on immediate action, and not more empty promises.

Drawing on the support of American manufacturing, Congress expressed its own intent to force China to allow the Yuan to reflect an exchange rate set by the open market. On September 29, 2010, the House approved the Currency Reform for Fair Trade Act (HR 2378) by an overwhelming, bipartisan vote of 348 to 79. This vote is a powerful marker for where Congress and the American public believe the trading relationship with China currently stands.

We also hope you will emphasize other areas where China has violated international trade law. China’s government has repeatedly unfairly and illegally dumped and subsidized steel plate, pipe, and other products, causing U.S. steel producers, workers, and other industries to petition the International Trade Commission for relief. China’s state-owned Anshan Iron and Steel Group made a troubling investment in U.S. steel plants that we continue to believe will give China a beachhead to exploit the American steel market, lead to a loss of American jobs, and jeopardize our national security.

China must know once and for all that American patience for its unfair and illegal trade practices, and its exploitative and anticompetitive policies, has run out. Beijing’s intransigence is placing our trading relationship on ever-perilous ground.

Steel made in America supports 1.2 million jobs, adds $350 billion to our national economy, and has built America and the world. These are jobs that make steel, supply the resources to make steel, and make things out of steel — from the smallest medical device to skyscrapers to satellites. But these jobs and the families who depend on them are all at risk unless we stand up for steel. We hope you will do so without qualification when you meet with President Hu.

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