This bipartisan legislation, the Currency Exchange Rate Oversight Reform Act of 2011, which I introduced and cleared the Senate by a 63-35 vote, addresses one of the biggest challenges facing Ohio manufacturers – unfair competition with Chinese products that are flooding our markets and priced artificially low due to the Chinese government’s undervaluation of its currency.
The problem is clear: some of our global competitors – like China – are not playing by the rules.
China’s blatant currency manipulation – the act of undervaluing its currency, the yuan, to sell products at drastically low prices – drives American companies to go out-of-business -and continues to harm our economy.
In June, a report by the Economic Policy Institute showed that addressing foreign currency manipulation could support the creation of up to 2.25 million American jobs.
The bipartisan Currency Exchange Rate Oversight Reform Act of 2011 is a common sense solution that would ensure that tools, such as U.S. trade laws, may be used to counter the economic harm to U.S. manufacturers caused by currency manipulation. It would establish new objective criteria to identify misaligned or undervalued currencies.
This legislation would also trigger tough consequences for countries, like China, that fail to adopt appropriate policies to eliminate currency misalignment, in accordance with World Trade Organization (WTO) standards.
We know that Ohio workers and Ohio manufacturers can compete with anyone. But when a country 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 recent report shows that that the growing trade deficit with China has cost the United States more than 2.8 million jobs since 2001, including more than 1.9 million manufacturing jobs.
Ohio, alone, has lost more than 100,000 of those manufacturing jobs due to the U.S. – China trade deficit.
A manufacturing plant manager in northeast Ohio wrote to me about the affect of China’s inflated currency on his business.
“When is the U.S. government going to stop this continued [bias] toward Chinese manufacturing instead of U.S. manufacturers?”
American doesn’t need to cheat; our domestic manufacturers just need a chance to compete.
We’ve seen how Ohio jobs have been created when fair trade rules are enforced. For example, after the International Trade Commission (ITC) ruled in 2010 on behalf of Ohio seamless steel tube producers, Vallourec announced it would build a new facility in Youngstown – creating 700 jobs and more than 400 good-paying permanent jobs.
In September 2010, I submitted testimony to the ITC on behalf of coated paper manufacturers in Ohio – including SMART Papers in Hamilton – that have been hit hard by illegally subsidized imports. The ITC voted unanimously to apply duties on Chinese coated paper imports and some Ohio jobs were saved.
Currency manipulation is a form of subsidy and everyone knows it. That is why this new legislation is critically important to putting people back to work. It will call currency manipulation by its true name: illegal subsidy.
This bill would help level the playing field for our businesses and manufacturers – and that’s one of the reasons why there is large bipartisan support for it.
The best way to move America’s economy forward is to make sure that every American who wants to work has a job. And that’s why the federal government has a responsibility to ensure that domestic manufacturers and small businesses can compete with the rest of the world.
This bill is not anti-China; but it is pro-America. To promote Ohio-made goods and protect Ohio jobs, we need a common-sense trade policy that rejects currency manipulation and puts Ohio workers first.
Workers and manufacturers have endured years of talking and no action. Now that the Senate has stood up for Ohio manufacturers and workers, it’s time for the House to do the same.
Sherrod Brown is a United States Senator from Ohio.