At the four hearings we held this year on China, we heard from many experts about our economic relationship with China, and in particular, China’s currency policy.
There is no debate that China’s currency is fundamentally misaligned. We all agree that China must take prompt action to allow market forces to determine the value of its currency.
But let’s not kid ourselves – there are far larger issues with regard to China and our trade imbalance. The majority has squandered the opportunity to address issues like intellectual property rights, indigenous innovation and a host of other non-tariff barriers that are wreaking havoc on American employers, their workers and our economy. Yet, here we are, 4 years into their majority and just over 5 weeks until an election, and the sum of this Committee’s action on trade is a bill dealing only with currency. That is more than disappointing.
Despite my disappointment about the broader trade agenda – or lack of one — the bill before us does deserve consideration. In the past, I expressed serious concern with a number of legislative proposals – including the original version of HR 2378 – that could potentially expose the United States to WTO sanctioned retaliation and undoubtedly do more harm than good. In fact, Kevin Brady and I sent a letter to Ambassador Kirk asking him about whether such an approach would be WTO consistent. We have not received an answer.
At the same time, I have always said – as I did last week – that it would be an enormous mistake to give up completely on addressing China’s currency policy.
The substitute we are considering today is substantially modified and addresses some of the concerns I and many others have expressed. I appreciate that the Chairman has taken into account the many issues that Republican Members raised at our four hearings in drafting this legislation.
Rather than tinker at the margin, the Chairman has completely thrown out the troublesome original version of HR 2378. The measure no longer mandates that the Department of Commerce automatically adjust antidumping and countervailing duty calculations to account for China’s currency policy. Rather, it removes the antidumping portion entirely and leaves the countervailing duty decision entirely in the discretion of the Department of Commerce, as under current law.
The substitute allows Commerce to consider many factors in determining whether or not China’s currency policy satisfies the technical definition of an export subsidy. It does not presuppose an outcome. The substitute does not redefine “financial contribution” – one of the three countervailing duty tests – so Commerce will continue to analyze this issue based on current law.
These are critical changes from the original bill, which, on its face, violated our WTO obligations. While I remain deeply concerned about using the countervailing duty law to address China’s currency policy, I believe enacting this substitute does not result in such an automatic violation of our WTO obligations.
It does send a clear signal to China that Congress’s patience is running out, without giving China an excuse to take it out on U.S. companies and their workers.
It also sends an important signal to this Administration – Congress has heard enough; it is time to produce results. The Administration must step up its efforts to work with Europe, Japan, Brazil, India, and other Asian countries and set a clear timeline for action. The first step is to put the issue of global imbalances – which naturally includes China’s currency policy – on the agenda at the November G-20 meetings in Seoul as a prominent item. I am disturbed to see that the Korean Finance Minister was quoted yesterday as saying that a country’s individual currency policy is not an appropriate topic for the G-20. The Administration needs to change this dynamic.
Let me emphasize: The fact that the Administration has not moved aggressively on a multilateral basis, combined with the need by some to put politics above job creation right before the election, are the reasons we are here today considering legislation that is better than the original, but still won’t resolve our trade imbalance with China.
While I will vote in support of the substitute, I am also deeply concerned that this is the only mark-up of a trade bill we have had in the 111th Congress. While this legislation addresses an important issue, it will not advance the goal of doubling exports in five years. We must move expeditiously on the pending free trade agreements, work harder to open new markets to our exports, and address our broader economic issues all over the world and with China.
With that, I yield back.