OPENING STATEMENT BY COMMISSIONER MICHAEL R. WESSEL

U.S.-China Economic & Security Review Commission

Field Hearing on "The Impact of U.S.-China Trade and Investment on Key Manufacturing Sectors"

September 23, 2004
Akron, Ohio

The Commission is pleased to be meeting today in Akron to continue its comprehensive investigation of the how the U.S.-China trade and investment relationship is affecting vital regions and sectors of our economy. This is the third in a series of field hearings the Commission has held this year.

I am pleased to co-chair today's hearing with my colleague, Commissioner June Dreyer. I will chair the morning panels and Commissioner Dreyer will chair this afternoon's panels.

We would like to take this opportunity to recognize the outstanding support and assistance we have received from Mayor Don Plusquellic and his very capable staff. A special thanks goes to Laraine Duncan, Deputy Mayor for Intergovernmental Relations, who assisted us with the facility and logistical arrangements. We want to personally thank you, Laraine, for all your personal efforts on our behalf.

We owe a special thanks and our deep gratitude also to Mark Williamson, John Valle, and Laurie Hoffman of the mayor's office for their support and assistance. They did an outstanding job for us. Thanks to each of you.

We also want to thank Congressman Sherrod Brown and his staff for their assistance and support. The personal efforts and hard work of Brett Gibson, Laura Pechaitis, Mike West and Joanna Kuebler were instrumental in our ability to successfully conduct this important regional public hearing.

Finally, we want to thank Congressman Regula and his office, especially Karen Buttaro, for their help in organizing today's hearing and witnesses.

The US-China Economic and Security Review Commission was created by Congress in 2000 to monitor, investigate, and report to Congress on the national security implications of the bilateral trade and economic relationship between the United States and the People's Republic of China.

In June of this year, we issued our second comprehensive report. We did so with a unanimous vote - Democrats and Republicans, representatives from business and labor, Commissioners with varied backgrounds in government and in the private sector. While the Commission's report is comprehensive, it's conclusion was simple: "a number of the current trends in U.S.-China relations have negative implications for our long-term economic and national security interests, and therefore that U.S. policies in these areas are in need of urgent attention and course corrections."

Ohio has been called ground zero in this year's Presidential race. That's not an issue this Commission will address, that's for the voters to decide.

But, Ohio is ground zero in terms of the impact that trade has had on our nation. In the past four years Ohio has lost almost 19% of its manufacturing jobs. That's over two-thirds of the total private job loss in Ohio over the same period.

Ohio maintains a merchandise trade deficit with China that increased by more than 8% from 2002 to 2003. Ohio is not alone: Forty-eight states have merchandise trade deficits with China, and all but two of those states saw their deficit increase in 2003.

The Commission's focus here today on America's manufacturing base stems not only from the fact that it is explicitly mentioned in our Congressional mandate, but also because manufacturing is an indispensable part of the U.S. economy. Two-thirds of the money that the U.S. spends on research and development is spent by the manufacturing sector, and 90% of new patents originate in manufacturing. Manufacturing is also important for the maintenance of a middle class, with its jobs paying 20% more than the average American jobs, accompanied by better benefits.

As we explore the impact of U.S.-China economic relations on Ohio and the neighboring region, we will be focusing on how U.S. trade policies can better respond to the challenges posed by China. Certainly more effective and aggressive enforcement of our trade agreements is called for. But beyond that there may be policy reforms that are needed to right the growing trade imbalances we are seeing in so many vital manufacturing sectors.

So I thank all of the participants who are here to aid us in our duty to inform and advise Congress of the implications that the U.S.-China trade and investment relationships hold for the American manufacturing base, the American economy, and ultimately the American way of life.

Our first panel will help provide an overview of the overall impact of trade with China on Ohio. We are pleased to have before us Mr. William A Burga, President of the Ohio AFL-CIO. We also have Dr. Jon Honeck, a research analyst with Policy Matters Ohio, and economic policy think tank. Mr. David Hansen, Managing Director of the Ohio Manufacturers Association will then speak, followed by Mr. Jeff Otterstedt, General Manager of CLOW Water Systems Company who has specific experience in terms of the impact of trade with China on his company.

We will hear from the witnesses in the order in which they were introduced. So that all of the Commissioners can have adequate time to discuss these important issues with the witnesses, we ask that each witness speak for no more than 7 minutes. At the end of the panel's presentation, each Commissioner will be recognized for 5 minutes.