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U.S. Sen. Sherrod Brown on Fair Trade

Posted by Will Rice (will) on Nov 07 2011 at 4:23 PM
FALL 2011 >>

By U.S. Sen. Sherrod Brown

One of the biggest jobs bills to pass this session of Congress – one with the potential of creating or saving two million jobs with no cost to taxpayers – passed the Senate recently with strong bipartisan support.

Now is the time for the House of Representatives to act on this job saving legislation. Here’s why:

Organizations like Americans for Democratic Action know the value of advocating for trade policies that put people before profits. They are not in the minority. We know that American workers and American manufacturers can compete with anyone. We have skilled, productive workers and a wealth of resources. But when a country like China purposefully manipulates its currency so that its exports are cheaper, that’s not competing – that’s cheating.

The result? U.S. exports are more expensive and a deluge of cheap imports flood our markets, costing American manufacturing jobs.

A lot of jobs.

A report released in September estimates that our trade deficit with China, exacerbated by Chinese currency manipulation, has caused the loss of more than 2.8 million American jobs in the past ten years – with two-thirds of the lost jobs in the manufacturing industry.

Currency manipulation provides an unfair subsidy to Chinese exports – of up to 40 percent by most economists – and is the most protectionist policy of any major country since World War II, according to economist C. Fred Bergsten of the Peterson Institute. Additionally, American manufacturers seeking to sell their products to China – our nation’s fastest growing export market – are hit with the same percentage disadvantage in what amounts to an unfair tariff. The cost advantages enjoyed by Chinese manufacturers result in the loss of American jobs.

After all, if you were deciding between filling your gas tank at two stations, and one could offer the gasoline at a price that was 25-40 percent lower than the other, which would you choose?

ADA works to illustrate the choices we have: putting people before profits or maintaining the status quo. That’s why I introduced the bipartisan Currency Exchange Rate Oversight Reform Act of 2011, which cleared the Senate by a 63-35 vote and has been sponsored by 22 of my colleagues from both sides of the aisle, to ensure a level playing field for American manufacturers.

The centerpiece of our bill – which I’ve worked on this year with Sen. Olympia Snowe (R-ME) – treats currency manipulation as an unfair subsidy and an illegal trade practice, providing the government with the tools to impose duties on these products flooding our markets.

We’ve seen how jobs in my home state of Ohio have been created when fair trade rules are enforced. For example, after the International Trade Commission ruled in 2010 on behalf of Ohio seamless steel tube producers, V&M Star Steel announced it would build a new facility in Youngstown, Ohio – creating 700 construction jobs and more than 400 good-paying permanent jobs.

Allowing Chinese currency manipulation to also be treated as an export subsidy would allow more Ohio industries to petition the ITC to stand up to unfair foreign imports. It could mean jobs for a number of industries – from paper to tires to wind components to aluminum. And, it means no more foot-dragging by our government when it comes to standing up for American manufacturing.

Our bill also includes tools for the Administration to combat currency manipulation. By improving oversight of currency exchange rates, the bill ensures that the Treasury Department would properly identify countries that undervalue their currencies and act accordingly. And, it would establish new criteria to identify countries manipulating currency – and trigger tougher consequences for those that engage in such unfair trade.

It’s clear that Chinese currency manipulation undermines American manufacturing and our very own job-creating efforts. That’s why organizations like ADA are critical to amplifying the voices of American workers. In June, a report by the Economic Policy Institute showed that addressing currency manipulation could support the creation of up to 2.25 million American jobs.

Our bipartisan bill is a jobs bill. It would help level the playing field for American businesses and manufacturers and help spur our economic recovery.

Workers and manufacturers have endured years of talking and no action. It’s time that the House stands up to the Chinese, rather than passively accepting the war waged on American manufacturing.

Senator Brown (D-OH) is chair of the Agriculture, Nutrition & Forestry’s committee’s subcommittee on Jobs, Rural Economic Growth, and Energy Innovation.

How “free trade” winds up hurting both the U.S. and our trading partners: an essay by economist and ADA Board member Paul Crist, Page 16.