Mr. President, I rise today to introduce legislation that will help America's manufacturers compete on even terms with foreign manufacturers. For generations, American manufacturing has been a tremendous source of pride and a ladder to the…
Mr. President, I rise today to introduce legislation that will help America's manufacturers compete on even terms with foreign manufacturers.
For generations, American manufacturing has been a tremendous source of pride and a ladder to the middle class. Unfortunately, over the last several years, the manufacturing sector of our economy has suffered disproportionately and millions of good jobs have been lost. In my home State of West Virginia, well over 10,000 manufacturing jobs have disappeared since 2001. Workers and manufacturers in all of our States have found it increasingly difficult to compete in today's global markets, when the odds are stacked against them because of unfair trading practices.
American industry can compete with anyone in the world when it's a fair fight. Our domestic and international trade laws were set up to establish a level playing field, but unfortunately some of our trading partners have repeatedly found ways to circumvent these laws in order to gain an unfair advantage in trade with the United States. This has led to our record-breaking--and still growing--trade deficits, which threaten the long-term health of our economy, and have contributed to the migration of manufacturing jobs to factories overseas. This is an enormous problem that the United States must face and conquer.
A large part of the problem in recent years is that the Bush Administration has not been an aggressive enforcer of U.S. domestic trade laws. It has also failed to successfully advocate for U.S. interests in the multilateral dispute settlement setting. The bill I introduce today, the Strengthening America's Trade Law Act of 2007, will improve our ability to correct deficiencies in four areas of U.S. trade policy: first, it will address problems in the U.S. approach to the WTO Dispute Settlement process; second, it will strengthen antidumping remedies, third, it will expand
the reach of countervailing duties, and fourth, it will remove the President's discretion to disregard the recommendations of the International Trade Commission in certain circumstances.
The steel industry is perhaps the best-known example of how our trade laws can help or hurt domestic industry when it is injured by unfair foreign trade practices, but industries from timber to chinaware to candlemaking are all too familiar with this point.
This bill contains a number of provisions that would provide meaningful improvements to U.S. trade law. The United States would remain fully compliant with its obligations in the World Trade Organization under this legislation.
Let me briefly describe what this bill will do to level the playing field for American manufacturers.
Title I of the Strengthening America's Trade Laws Act bolsters the United States' position in WTO dispute settlement proceedings. The dispute settlement system set up in 1994 upon the creation of the WTO was intended to establish a rules-based system of enforcing trade agreements. However, recent cases involving U.S. application of its laws regarding import surges, anti-dumping and countervailing duties have raised concerns about the fairness of the system.
To address these concerns, Title I allows the direct participation in WTO dispute settlement proceedings of the U.S. business and trade associations that are directly affected by these proceedings, which would improve the prospects of zealous advocacy on behalf of U.S. interests at stake. It also creates a Congressional Advisory Commission on WTO Dispute Settlement that would analyze WTO decisions that are adverse to the United States, report to Congress on the propriety of the decisions and provide guidance for how the Congress might proceed in responding to adverse decisions.
Title I also requires Congressional approval of all measures taken by the U.S. government to comply with adverse decisions. In most cases, compliance with an adverse WTO decision calls for legislative changes, but in some cases such as the recent case involving ``zeroing'' on dumping determinations, the Bush Administration has determined that the United States can comply with the adverse decision through regulatory changes such as altering the methodology through which the Commerce Department calculates the dumping margin. This provision of my trade bill would prevent the Administration from side-stepping Congress in determining how to respond to an adverse decision in the WTO. Congressional oversight is an important element of our trade policy, and these provisions would help restore it.
Title II of the Strengthening America's Trade Laws Act tightens the rules in anti-dumping cases in favor of the petitioning domestic industry and makes it harder for dumping countries and businesses to circumvent the rules. Additionally, it applies a stricter methodology for determining the market value of goods from countries designated as ``nonmarket economies'' (NMEs). These countries presently include small former Soviet republics such as Turkmenistan and Georgia, and also large U.S. trading partners such as China. These NME designations are an important element of U.S. trade policy, and Title II gives Congress the ability to approve or disapprove any change in a country's NME status.
Title II also overrules the recent decision by the Federal Circuit in the Bratsk case, which inappropriately added a new requirement not presently included in our anti-dumping laws, namely that ITC anti- dumping investigations must include evaluating the role of imports that are not actually subject to the investigation. This speculative element is not part of the investigation process that Congress mandated the ITC to follow in anti-dumping cases, and my bill would remove this judicially-added requirement that was never a part of our trade remedy law.
Title III of the Strengthening America's Trade Laws Act expands the reach of countervailing duties (CVDs) in order to address two significant sources of unfair trade: China's artificially undervalued currency, and the disparate treatment that international trade rules give to value-added taxes (VAT) used by most U.S. trade partners.
Unlike anti-dumping duties, CVDs have not been applied against imports from NME countries like China, leaving a huge hole in the trade remedies available to U.S. manufacturers who are competing against subsidized imports from China. This bill explicitly makes CVDs applicable to NME countries, and it and provides a methodology for determining subsidy levels in NMEs that is similar to the methodology for determining fair market value in anti-dumping investigations regarding NME countries.
Next, Title III designates currency exchange rate manipulation as a subsidy that can be addressed by application of CVDs. It is well known that China's government pegs its currency's value to the value of a ``basket'' of currencies including the dollar rather than allowing the value to be determined freely in currency exchange markets. This practice keeps China's currency artificially low, boosting Chinese exports and protecting Chinese domestic industry from imports. In December, Federal Reserve Chairman Ben Bernanke called this practice what it is, an ``effective subsidy.'' This provision of Title III would allow the U.S. government to apply our CVD law to this subsidy.
Title III also contains a vital provision that would lead to the possible future use of CVDs as a remedy for the differential treatment that international trade rules give to value-added taxes (VAT) used by most U.S. trade partners. WTO rules provide that rebates on ``direct'' taxes such as income, employment, and real estate taxes constitute subsidies, whereas rebates on ``indirect taxes'' such as sales and VAT taxes are not subsidies. This puts U.S. producers at a significant disadvantage to producers in countries that use value-added tax (VAT) systems.
Over 135 U.S. trading partners use VAT taxes for a significant amount of their revenue, and when U.S. exports enter a VAT tax country, they are subject to the importing country's VAT tax, whereas U.S. imports from a VAT tax country are not subject to the producing country's VAT tax. This unfair tax treatment constitutes both a hidden import duty for U.S. exports and a hidden export subsidy for VAT tax country products entering the United States.
This provision of Title III would push the USTR to negotiate this issue to a satisfactory conclusion within the next two years. Failing such negotiations, it would designate this differential treatment a countervailable subsidy which would then be subject to CVDs.
Finally, Title IV of the Strengthening America's Trade Laws Act would remove Presidential discretion to ignore the recommendations of the ITC in safeguard cases regarding China, or so-called ``Section 421'' cases. Section 421 of the legislation that provided for China's accession to the WTO is a ``safeguard'' provision that provides for temporary relief from surges of imports that have caused injury to domestic industry. There are a number of recent examples of President Bush's failure to take action in cases in which the ITC has recommended ``safeguard'' relief most notably on December 30, 2005, when he denied the relief that the ITC had recommended for U.S. steel pipe and tube manufacturers in the face of a surge of imports from China. Title IV would ensure that such denials do not happen in the future by removing Presidential discretion in applying safeguard measures in cases involving imports from China and instead making the findings and recommendations of the ITC the final word on the matter.
The Strengthening America's Trade Laws Act will provide meaningful improvements to U.S. trade law and a more level playing field for U.S. workers and manufacturers in an increasingly competitive global economy. I commend it to my colleagues and urge them to join me in pushing for its swift enactment. Congress has sat on the sidelines for too long as our country's finest manufacturers have been dealt blow after blow. This bill will not solve the trade deficit alone, but it is a reasonable start.
I am going to ask my leadership, in my caucus and on the Finance Committee, to work with me on this legislation, and I look forward to joining
forces with my allies on the other side of the aisle to move this bill. I ask unanimous consent that the bill be entered into the record. I ask unanimous consent that the text of the bill be printed in the Record.