December 13: Kaptur’s Statement at China Commission Hearing

Congresswoman Kaptur's statement as prepared for delivery at the China Commission hearing on December 13, 2011:

This hearing asks the question, "Has China Kept Its Promises to the WTO?"

The answer is a clear and unmistakable no.

In 1999, before China was granted Permanent Normal Trade Relations, then President Clinton argued, "the agreement will create unprecedented opportunities for American farmers, workers, and companies to compete successfully in China's market."

This rosy scenario never materialized. China did not open up its market, and we witnessed enormous job losses and an unprecedented decline in American manufacturing.

Today, the U.S. trade deficit with China is mammoth. Last year, the total U.S. trade deficit was approximately half a trillion dollars, and over half of that, $273 billion, was our trade deficit with China. Our cumulative trade deficit with China since granting them Permanent Normal Trade Relations is approximately $2 trillion.

You can see the money and the jobs literally flowing out of our country.

I know that Clyde Prestowitz, who is testifying today, has estimated that every billion dollars in trade deficit translates to roughly 15,000 lost U.S. jobs. The quick back-of-the-envelope math means that the U.S. lost over 4 million jobs to China last year.

While the unemployment numbers improved slightly last month, job creation needs to be our number one priority. Economists have estimated that the U.S. will still need to create 28 million jobs between now and 2018 to employ all the U.S. workers who want a job.

I have served on this Commission since its creation, and its work is so very important.

The outflow of capital and the outsourcing of jobs from the U.S. to China is not an accident.

The predictions that many of us made that Beijing would not live up to its side of the bargain after China officially joined the World Trade Organization have come true.

Concerns that China would use its increased independence to manipulate its currency in order to increase its trade balance with the United States—which was raised by organizations like the Economic Policy Institute—were ignored a decade ago.

And what we see today is pervasive currency manipulation on the part of Beijing. This is widely acknowledged by everyone from the President to the majority of Members of Congress. The only debate seems to be to what degree the yuan is undervalued. Yet, we see no strong action from the Treasury, and Congress has failed to mandate stronger action.

The promises that U.S. manufactured products would gain real access to the Chinese market have never been kept. I want to point out just one example that the New York Times reported on earlier this month, and I ask that the entire piece be included in the record.

Do you know what a Jeep Grand Cherokee costs in China? The answer: $85,000. That's about three times the cost in the U.S. Why? According to the New York Times, it's due to a clever and obvious set of protective tariffs. And what have we done about it?

In Toledo, we make the Jeep Wrangler, and I expect this Commission to take the issue of China's treatment of the U.S. auto industry seriously, and to further investigate this issue for inclusion in its next annual report. And, I am asking that the U.S. Trade Representative develop a comprehensive strategy for addressing China's anti-competitive behavior.

For those of us from Northern Ohio, the impact of China's unfair trade practices do not stop with the auto industry. We are a center for the domestic solar industry, which has so much promise for creating true energy independence for our republic. Our domestic solar industry has publicly argued for some time that the Chinese are dumping photovoltaic cells on the U.S. market, and the recent U.S. International Trade Commission ruling in favor of the U.S. industry confirms it. I am going to ask that the China Commission also follow up on this issue, and that we make it clear to the Administration that we demand strong action in response.

Everywhere we look, it is the same story. The economist Pat Choate testified before the Commission earlier this year saying that, "China is the world's leading infringer of U.S. owned patents, copyrights, trademarks, and trade secrets." And, he further notes in his testimony that, "The challenge...is beyond the capacity of the Office of the United States Trade Representative to address."

We need to take China's failure to live up to its commitments much more seriously. We need a trade policy that creates jobs here in the U.S. We need to take on currency manipulation, unfair tariffs on American made products, undercutting American manufacturers through unfair practices, and outright theft of American intellectual property.