Curreny Exchange
Floor Speech
Mr. BLUMENTHAL. Madam President, I rise as a proud cosponsor of the Currency Exchange Rate Oversight Reform Act, S. 1619. We are all aware, in this Chamber and around the country, that China has been manipulating its currency flagrantly and blatantly at the expense of our businesses in Connecticut and New York and around the country at the expense of American workers. This measure is necessary to protect American jobs and American workers.
Chinese currency manipulation is a job killer, very simply. At a time when so many are desperate for work and so many Americans and citizens of Connecticut are seeking good jobs, this measure will help protect American workers and save American jobs, which is why I am proud to be a cosponsor of this measure.
I am proud to have begun this fight well before I became a Senator and well before I even thought of becoming a Senator, when I was attorney general of the State of Connecticut, because I heard from Connecticut businesses about the effects of Chinese currency manipulation in their efforts to sell their goods and services not only in China but around the world and even in America. Undervaluing Chinese currency puts American businesses at a disadvantage. It is a hidden export subsidy. It is a means of underpricing Chinese goods and services at the expense of ours. That affects not only our exports to China, but it affects our sales of airplanes in Europe, it affects the sales of all kinds of products--both high-tech and others--in this country, and it deprives the United States and its businesses of a level playing field.
The extent of that undervaluation is actually unknown, even as we speak. It is probably in the range of 25 percent. Economists tell us it is anywhere between 20 percent and 50 percent. The Chinese have permitted their currency to rise slowly, perhaps about 6 percent since June of 2010, but the extreme undervaluation before that period of time--in the years that led to June 2010--was relentless and tireless and successful. One of the great success stories of currency undervaluation is the Chinese doing so with theirs. We are at a point where, rightly, we have lost patience.
When I first asked the Treasury of the United States to label and conclude that China is a currency manipulator--months, even years ago--there was an opportunity to take the kind of action this measure would readily lead it to do, and it must do it now. This bill provides consequences for countries that fail to adopt appropriate policies to eliminate currency misalignment and includes tools to address the impact of currency misalignment on American manufacturers, including the use of countervailing duty law to impose tariffs on imports benefiting from government subsidies.
Very simply, it provides tools that the American Government can and should use when there are misalignments of currency that result from government policies, and it eliminates some of the barriers in our current law that now exist and restrict the American Government from taking action to protect American businesses. So it is a good measure, a commonsense step toward fairness and a level playing field for American businesses, and it means we would protect ourselves, as we have a right to do in an ongoing trade war. It is a war, not a shooting war--perhaps not explicit--but it is a trade war we should acknowledge and recognize as a fact of life for our businesses.
All this talk about currency and renminbi and the abstract and seemingly arcane discussion, in economic terms, may seem far away to many citizens of Connecticut, but it is not arcane or abstract to Steve Wilson at Crescent Manufacturing of Burlington--a company that makes precision fasteners, many of them used in defense of our country, sold in this country as well as abroad. Crescent Manufacturing has hard-working, skilled workers who compete with Chinese manufacturers whose production costs are dramatically lower because of the undervalued Chinese currency. Steve Wilson came to me and said, in effect: Give us a level playing field. That is what this bill does. He said it not only on his own behalf, as a manager and an owner, but on behalf of his workers because the number of those workers was reduced as a result of the lack of a level playing field.
Earlier this year, I worked with my colleague in the House of Representatives, Congressman Chris Murphy, to conduct a survey of Connecticut manufacturers. We gathered data from 151 different companies all across the State of Connecticut, and the information they shared paints a dramatic picture of the business climate for companies in Connecticut and America today and the challenges they face as they seek to create jobs and stay competitive. Of 151 manufacturers that participated in our survey, 73 percent say they have Chinese competition--73 percent are competing with Chinese companies--and 57 percent--almost 60 percent of all those companies--said China's refusal to operate on a level playing field is harming their businesses. The majority of those companies that responded to that survey--manufacturers in Connecticut--say they want a level playing field or they are harmed by unfair practices in China's undervaluing their currency.
We all know, at this point, China deliberately manipulates its currency to boost its exports, and Connecticut manufacturers know it better than anyone. They have made it clear, if we are serious about keeping American manufacturing competitive, if we want to make it in America, if we want ``Made in America'' to mean what it should, and if we want our economy to grow, we need to stand up to countries that rig the system in their favor--unfairly in their favor.
The Alliance for American Manufacturing estimates our surging trade deficit with China--largely caused by Chinese currency manipulation--cost 2.8 million American jobs over the last decade, and that is 31,600 in Connecticut alone. These were jobs lost to our workers unfairly.
On March 25, 2011, the IMF declared that China's currency remains ``substantially undervalued.'' That is a serious charge from an international agency that is not biased toward one country or another, and it implies that China, in failing to address the undervaluing of their currency, is in direct violation of the General Agreement on Tariffs and Trade, which it has signed. Far from being contradictory to international law, this bill serves the interests and intent of the General Agreement on Tariffs and Trade. It serves article XXI of the GATT Uruguay Round and allows a member of the World Trade Organization and America to take action which it considers necessary for the protection of essential security interests.
Nothing is more essential to our security than jobs. Nothing is more critical than dealing with our trade deficit. Nothing is more important than stopping the undervaluation of the Chinese currency that consistently, unfairly, and unacceptably works against our exporters. We must fight these fundamentally unfair trade practices of China. American manufacturers deserve this level playing field, and this bill will help to assure that for them.
I will continue to fight to protect Connecticut manufacturers and businesses against any unfair trade practices anywhere in the world, and this bill stops China and any other country that would misalign its currency to the detriment of our security as a country and Connecticut's manufacturers and businesses as well as those in the country as a whole.
I thank the Chair, I yield the floor, and I suggest the absence of a quorum.
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