FOR IMMEDIATE RELEASE
February 13, 2007
Kagen Acts Save Wisconsin Jobs “The Bleeding Must Stop Now”
(WASHINGTON, D.C.) Congressman Steve Kagen, M.D. is sponsoring legislation to defend Wisconsin’s higher-wage jobs against China’s unfair trade practices that are destroying American jobs, farms and industries.
Congressman Kagen is sponsoring the bipartisan Fair Currency Act as today the Commerce Department reports yet another record trade deficit – $763.6 billion for 2006. China ran the biggest deficit with the U.S. at $232.5 billion, another record.
“The effect of this huge trade deficit is the depression of our American economic growth, replacing American-made goods with imports, and replacing American workers with cheap foreign labor,” Congressman Kagen said.
China’s currency – estimated to be undervalued by over 40 percent – illegally subsidizes China’s exporters, giving them an unfair advantage over American producers.
“The bleeding must stop. Everyone knows the Chinese currency is undervalued,” Kagen said. “Because of the unfair manipulation of their currency, hard-working families in Wisconsin are losing their jobs. The bleeding must stop and it must stop now,” said Kagen.
The Fair Currency Act of 2007 is a bipartisan piece of legislation endorsed by an alliance of over 40 industry, agriculture, and worker organizations. It provides real solutions to China’s predatory trade practices.
The Fair Currency Act imposes a surcharge, or countervailing duty, on imports from countries that don’t play by internationally accepted rules.
In addition, it strengthens our national security by prohibiting the Defense Department from buying Chinese imports that unfairly compete with our domestic defense industries.
The Fair Currency Act provides real solutions in the following ways:
Defines Currency Misalignment as a Prohibited Export Subsidy
Provides U.S. injured industries with effective remedies in the form of countervailing duties on imports benefiting from the intervention of a governmental authority. This portion of the legislation applies equally to any country, whether a market or non-market economy, whose exchange-rate is found to be unfairly misaligned.
Holds China Accountable for Unfair Misalignment Practices
Addresses the critical China trade issue by specifically clarifying that the inclusion of exchange-rate misalignment by the Peoples Republic of China is a condition to be considered under Section 421 of the Trade Act of 1974. This portion of the legislation was agreed to by China, is consistent with the WTO, and holds China accountable to its market-disruption agreements made as a condition to its accession into the WTO in 2001.
Protects our National Security and Defense Industrial Base
Includes a national security component that prohibits Department of Defense procurement of Chinese imports that compete with our domestic defense industrial base if China’s currency misalignment is determined to be contributing to the disruption of the U.S. industry that manufactures those products.
Requires the Secretary of the Treasury to Take Action
Requires the Secretary of the Treasury to analyze semi-annually whether there is fundamental misalignment or exchange-rate manipulation by any trading partner, and bars the administration from supporting increased voting rights in international financial institutions such as the IMF for such violators.
China’s undervalued yuan is effectively a 40 percent tax on all U.S. agriculture and manufacturing exports. This act eliminates this unfair advantage – and thereby opens the China market for the first time to many American exporters.
202 225-5665 (office)
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