Fair Trade not Free Trade !

USW Pres. Gerard Gives Testimony Before U.S. House Committee

American workers expect government action on China’s currency manipulation

Washington, DC (Sept. 15, 2010) – Leo W. Gerard, International President(top left) of the United Steelworkers (USW), today testified on behalf of the AFL-CIO before a packed hearing of the Ways & Means Committee of the U.S. House of Representatives on China’s exchange rate. The hearing was led by Chairman Sandy Levin (D-MI), who stated: “There is no real question that China’s deliberately undervalued exchange rate is unfair, contributes to global trade imbalances, and cost the U.S. jobs and economic growth, particularly in the manufacturing sector.” Gerard responded by saying, “The question now is do we have the will to act to level the playing field and provide the support and assistance that millions of American workers and their communities expect and deserve?” He said the American economy remains mired in a deep recession. “Unemployment, underemployment, wage stagnation, foreclosures all paint a grim picture of an economy still struggling to recover.” Describing the past decade of soaring annual trade deficits with China, the USW president said they started from $84 billion in 2001 and have reached $227 billion last year. “This is clearly not the trade profile that the U.S. government predicted as the likely outcome of China’s WTO accession. But it is the result of concerted strategic interventions by the Chinese government over many years – and inaction by our own.” He declared, “These trade deficits are unsustainable and require immediate action. What we desire is a mutually respectful, functional and sustainable bilateral economic relationship.” Strongly asserting that the Chinese government’s practices amount to as much as a 40 percent subsidy for the products they export to the U.S., Gerard adds it in effect is “a tax on products we try to send there, while siphoning investment dollars vital to keeping the U.S. at the forefront of research and development.” In his testimony, Gerard revealed the drag on GDP growth that comes from the bilateral trade deficit has significantly broader economic implications. He said, “Preliminary estimates from the Economic Policy Institute (EPI) points to as much as a $500 billion reduction in our nation’s federal budget deficit over the next six years from ending China’s currency manipulation.” He argued before the committee, “Lost manufacturing jobs lead to lost tax revenue and higher budget deficits that limit our ability to invest in our future. This puts substantial pressure on federal, state and local budgets resulting in layoffs of teachers, police and other emergency responders. It doesn’t have to be this way.” The USW president wrapped up his comments by forcefully saying, “American workers, communities and industry have every right to expect their government to take action. It is long overdue. Speaking directly to the full House Committee, Gerard emphatically said: “The time for talk is over. We can create jobs by enforcing our trade laws consistently and proactively. On behalf of the working families of this nation, I urge you to take action now.” Gerard advocated the legislation to stop China’s currency manipulation was the Ryan-Murphy Bill, the Currency Reform for Fair Trade Act of 2010 (H.R. 2378).

The USW testimony submitted to the US House Ways & Means Committee is at: www.usw.org/.

Editorial : This writer has maintained for sometime now, that it`s TRADE, TRADE, TRADE !