New Schumer Report: Upstate New York Manufacturing Hit Hard By Unfair China Trade Practices Senator Unveils New Steps To Level The Playing Field
As Commerce Secretary Returns From China Empty-Handed, Schumer Announces Long-Overdue Senate Hearing on China Trade Schumers Plan Includes Restoring Funding to Manufacturing Extension Partnerships, Revaluing China Currency or Imposing a Temporary Across-the-Board Tariff on Chinese Imports Schumer Details Manufacturing Industry For Each County; Capital Region has lost app
The federal government must act immediately to bolster upstate New Yorks manufacturing industry, U.S. Senator Charles E. Schumer explained today. Schumer unveiled new, swift action to crack down on Chinas currency manipulation, and other critical steps needed to strengthen New Yorks manufacturing industry. Schumers bipartisan bill, cosponsored by Senator Lindsay Graham (RSC), allows for a 180day negotiation period between the US and China to revalue its currency, if the negotiations are not successful, a temporary acrosstheboard tariff of 27.5% will be applied to all Chinese products entering the United States.
Nobody knows better than New Yorkers, how Chinas unfair trade practices are devastating jobs here in the United States, Schumer said. It's no secret that the manufacturing industry has been getting killed throughout the country and New York is no exception. We need to fight to keep our manufacturing jobs from leaving New York and we need to wage that fight on two fronts. On one front, we must get tougher on other countries like China that give their companies unfair advantages by playing games with their currency. And on the other front, we must give companies here at home the tools and the support they need to succeed.
Schumer today discussed specific companies across upstate New York that illustrate Chinas devastating impact on American jobs, including the Marietta Corporation, headquartered in Cortland; Buffalo Color, Buffalo; Eastman Kodak, Rochester; Oneida Ltd., Buffalo; Precision Grinding and Manufacturing, Rochester; MT Picture Display, Elmira; and Prismatic Dyeing and Finishing in Newburgh.
In addition, yesterday, General Motors Corporation announced it would be cutting 25,000 manufacturing jobs by 2008. Currently, General Motors has two plants in New York, in Tonawanda and Massena, which employ nearly 3,300 New Yorkers. Schumer today wrote to General Motors Chairman and CEO Rick Wagoner, urging him to protect New York jobs because of the states topnotch workforce and how critical these jobs are to each community in New York.
Schumer released a new study today showing that tens of thousands of upstate New York jobs were lost between January 2001 and April 2005. Specifically, Schumers report found that:
" Over the last four years, approximately 8,900 manufacturing jobs in the Capital Region have been lost; " Over the last four years, approximately 11,900 manufacturing jobs in Central New York have been lost; " Over the last four years, approximately 27,400 manufacturing jobs in Rochester/Finger Lakes area have been lost; " Over the last four years, approximately 9,900 manufacturing jobs in the Hudson Valley have been lost; " Over the last four years, approximately 4,300 manufacturing jobs in the North Country have been lost; " Over the last four years, approximately 10,900 manufacturing jobs in the Southern Tier have been lost; " Over the last four years, approximately 21,300 manufacturing jobs in Western New York have been lost.
In order to bolster upstates economy, Schumer is leading a bipartisan effort to provide $112 million in funding for the Manufacturing Extension Partnership (MEP) program, which helps upstate New York's manufacturing companies by offering worker training, management consulting, and suggestions for new business practices to companies. The Administrations budget proposal would reduce funding for MEP, which has helped over 1,400 manufacturing companies in upstate New York stay afloat, by 57% from $117 million in FY2005 to only $46.8 million. In New York, the MEP program is credited with creating 625 and retaining 2,041 jobs in New York; increasing sales by $46 million; and realizing $13 million in cost savings for participating companies in 2003 alone.
Schumer today announced two major steps to promote his legislation that would level the playing field with China. First, Schumer urged the Administration to call for a summit on China trade with key Administration officials, including the Treasury Departments Special Envoy on China, and members of the House and Senate. Schumer said this would be an opportunity for all of the key players in this issue to discuss the next steps in getting China to stop its currency manipulation.
Second, Schumer announced today that the Senate Finance Committee Chairman Charles Grassley (RIA), at Schumers urging, has scheduled a hearing on China trade in the next few weeks at which senior Administration officials and trade experts will testify. One of the issues that will be discussed will be the SchumerGraham China Free Trade bill, which, when offered as an amendment to the State Department Authorization Bill, got an overwhelming vote in the Senate earlier this year.
Because China continues to peg its currency to the U.S. dollar, in 2004 we saw record trade deficits with China. Last November it was reported that our trade deficit with China grew by 25%. This number represents one quarter of our national trade deficit. Since 2000, the US trade deficit with China is up over 94% to $162 billion dollars. In one year from 2004 to 2005, the trade imbalance increased 30%. In computer manufacturing the deficit is up over 300%. During that time NYS has lost 20,000 computer equipment jobs. In apparel manufacturing the deficit is up 50% over 4 years, but textile manufacturing alone is up 100% in the first four months of this year alone. New York State has lost 27,000 textile jobs. In tool and dye, and heavy metal imports, Chinese imports are up almost $3 billion in four years. During that time NYS lost at least 21,000 machinery and fabricated metal jobs.
The Yuan sometimes known as renminbi has been tightly pegged to the U.S. dollar since 1994 (approximately 8.28 Yuan to the dollar). During that period of time, Chinas economy has grown dramatically, averaging over 8% per year. If Chinas currency freely floated in the market, as is the case with virtually all major world currencies, it would have appreciated, substantially reflecting China's underlying economic strength. However, it has remained at the same pegged value, and the result is that many economists estimate that the yuan is now undervalued by between 15 and 40%. This has a serious impact on manufacturing. The Michigans Manufacturing Technology Center estimated that all the competitive advantage a $10 million manufacturing plant in China has over $10 million plant in the U.S. would be erased by a 30% currency revaluation.
In order to hold the value of the Yuan within its tight and artificial trading band, the Chinese government has intervened in its foreign exchange markets. The practice of currency manipulation to gain a trade or competitive advantage violates World Trade Organization and International Monetary Fund agreements, of which China is now party. Chinas emergence as a manufacturing powerhouse at the expense of the United States raises significant economic security concerns and the question of whether a country that loses its ability to produce tangible products will long remain an economic power.
The bipartisan SchumerGraham China Free Trade bill allows for a 180 day negotiation period between the U.S. and China to revalue its currency, and if the negotiations are not successful, the tariff would be applied to all Chinese products entering the United States. If the President certifies to Congress within 180 days of enactment that China has made a goodfaith effort to revalue its currency upward, he may delay the imposition of the tariffs for an additional 180 days. If at the end of that 180day period the President determines that China has developed and started actual implementation of a plan to revalue its currency, the President may delay imposition of the tariffs for an additional 12 months.
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