The House Ways & Means Committee held a hearing yesterday (March 24, 2010) on currency manipulation. Sander Levin (D-MI) presided. CPA submitted this written testimony.
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WRITTEN TESTIMONY OF
COALITION FOR A PROSPEROUS AMERICA
BEFORE THE UNITED STATES HOUSE OF REPRESENTATIVES
COMMITTEE ON WAYS AND MEANS
HEARING ON THE EXCHANGE RATE POLICY OF THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA, AND ITS IMPACT ON THE U. S. AND GLOBAL ECONOMIES
HEARING DATE MARCH 24, 2010
Thank you Chairman Levin, and members of the House Committee on Ways and Means, for allowing the Coalition for a Prosperous America to present this written testimony to you. We respectfully request that this written testimony be accepted into the written record for this hearing.
SUMMARY OF TESTIMONY:
The Coalition for a Prosperous America, and its members, support neutralizing the persistent undervaluation of the Chinese renminbi through countervailing duties and/or anti-dumping duties. This can best be accomplished through passage of the Currency Reform for Fair Trade Act of 2009 (H.R. 2378). There is wide agreement that China persistently undervalues its currency and that the impact is a mercantilist one, not a free-trade result. The quantity of undervaluation is anywhere from 25 to 50 percent, a range that is agreed upon widely. This currency manipulation has in large part been an underlying cause of the Great Recession.
The volume of manufacturing and jobs off shored because of this unfair trade tactic has been devastating. As Treasury Secretary Geithner has argued, we cannot grow GDP without correcting this problem. Diplomacy and negotiation have been tried for several years, reached the upper levels with President Obama's November 2009 visit to China, and failed. Enforcement of international norms, which disallow such undervaluation, is necessary. The U.S. House should pass the Currency Reform for Fair Trade Act for 2009 (HR 2378) to neutralize this currency advantage and return to free and fair trade. Passage of HR 2378 is the most significant jobs creation and economic growth action that this body can take.
One of CPA's major concerns is that trade policy has trumped food and product safety. We allow importation of food and manufactured goods that do not meet U.S. quality standards, because trade flows are deemed more important than safety.
In the animal health world, the U.S. historically banned imports of cattle, pigs and sheep from countries that have known cases of foot and mouth disease, blue tongue and Bovine Spongiform Encephalopathy (BSE or mad cow disease).
But when BSE was discovered in Canada, our U.S. Department of Agriculture decided that trade was more important than U.S. animal health. The multinational meatpackers successfully persuaded USDA to keep the border to Canada open, to a large degree. The U.S. had three BSE cases starting in 2003, with cattle originating in Canada. Other countries cut off our export sales, but we allowed Canada to ship cattle to us. The U.S. beef and cattle market has suffered drastically because our borders are open to imports, but other doors are not open to our exports.
Thus, we are a major net importer of cattle and beef.
CPA agreed to sign on to a letter to the USDA protesting this policy. R-CALF USA, a major U.S. cattle producer organization and CPA member, initiated the letter. It is below the fold.
The Coalition for a Prosperous America filed official comments with the U.S. Trade Representatives office. The 1974 Trade Act, as amended, requires the USTR to annually inventory the most important foreign barriers affecting U.S. exports. This report is submitted to the President and Congress.
USTR has not, in the past or present, commented on the impact of foreign consumption taxes (VAT) or currency manipulation. It seems the belief is that those are U.S. Treasury issues. However, when USTR formally published a request for comment, CPA responded by placing the VAT and currency issues front and center.
The foreign VAT issue is quantifiably the biggest trade distorting practice we face. Currency is likely second.
The Coalition for a Prosperous America (CPA) appreciates the opportunity to provide input relating to significant barriers to the export of U.S. goods. CPA represents the interests of 2.6 million Americans - through our association and company members - who make and grow things.
Your Request for Comment seeks information on trade barriers including:
Import policies (e.g., tariffs and other import charges, quantitative restrictions, import licensing, and customs barriers);
Export subsidies (e.g., export financing on preferential terms and agricultural export subsidies that displace U.S. exports in third country markets)
The Coalition for a Prosperous America met with representatives from the U.S. Department of Commerce on October 21, 2009. We sent this letter as a follow-up, which describes the topics discussed.
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Dear Messrs. Siger and Sullivan:
Thank you for meeting with us on October 20, 2009. All of us attending from the Coalition for a Prosperous America (CPA) appreciated hearing your thoughts and future plans.
We are pleased that the Administration has placed a high priority on enforcing trade agreements and trade laws. It is hard to justify the position that trading partners should not abide by those rules. Lack of enforcement hampers public confidence, and our confidence, in U.S trade policy. However, enforcement is insufficient alone to solve the trade deficit problem.
October 26, 2009 - CPA letter to Chairman Baucus and Ranking Member Grassley of the Ways and Means Committee
CPA sent a letter to Chairman Baucus and Ranking Member Grassley regarding a Customs-related act that they are co-sponsoring. There is an advisory board associated with the customs agency that is dominated by the importers and multinationals, just as the Industry Trade Advisory Committees are dominated by them.
The letter asks the Senators to include more diversity, to include domestic producers, on the customs advisory committee.
CPA Labor Co-Chair Bob Baugh presented oral testimony before the Subcommittee on Railroads, Pipelines & Hazardous Materials (a subcommittee within the House Transportation and infrastructure Committee). Rep. Corrine Brown (D-FL-3) called the hearing to discuss high speed rail as a possible U.S. infrastructure initiative.
Bob Baugh presented in his capacity Executive Director of the AFL-CIO Industrial Union Council. His written testimony is below the fold.
CPA presented the following written testimony on July 21, 2009 to the Trade Subcommittee of the Ways and Means Committee. Rep. Sandra Levin (D-MI-12) held the hearing. The topic of the hearing was to examine the Industry Trade Advisory Committee (ITAC) system created by the 1974 Trade Act.
CPA's testimony argued that more domestic producer interests should be included in the ITAC system because the current representation is skewed too much towards the multinational and exporter interests.
The Coalition for a Prosperous America joined several other organizations in submitting this March 13, 2009 Official Comment to the Office of the U.S. Trade Representative today. Canada and Mexico are challenging the U.S. country of origin labeling rules for meat and produce. This letter advocates a vigorous USTR defense of those rules.
Last year 300 associations, companies and concerned citizens signed the Fixing America's Economy document. It is more important than ever for political leaders and candidates to take action.
