The U.S.-China Economic
and Security Review Commission has published the official
hearing record for its January
30, 2004 field investigation in Columbia, South Carolina
on "China's Impact on the U.S. Manufacturing Base."
The record is available on the Commission's website (www.uscc.gov) and in hard copy from the Commission.
The South Carolina field investigation
revealed the extent of the difficulties faced by America's
manufacturers, workers and communities as a result of manufacturing
competition from China. Senators Ernest F. Hollings (D-SC)
and Lindsey O. Graham (R-SC) took part in the proceedings
and expressed to the Commission their views regarding what
they perceived as China's unfair trade policies, including
its artificially undervalued currency, export subsidies, dumping,
and other WTO-inconsistent practices. Panelists representing
South Carolina's manufacturing industries - including textiles,
apparel, steel and plastics - provided vivid descriptions
of the challenges they face from Chinese competition. In
a letter to Congress included in the record, the Commission
offered a series of recommendations to reassess American trade
policies and to offer increased support for domestic manufacturing.
Among these were recommendations that:
·
The United States Trade Representative and the Department
of Commerce should immediately undertake a comprehensive
investigation of China's system of government subsidies
for manufacturing, including tax incentives, preferential
access to credit and capital from state-owned financial
institutions, subsidized utilities, and investment conditions
requiring technology transfers. USTR and Commerce should
provide the results of this investigation in a report that
lays out specific steps the U.S. Government can take to
address these practices through U.S. trade laws, WTO rights
and by utilizing special safeguards China agreed to as part
of its WTO accession commitments.
·
"The U.S. tax code should be restructured
to eliminate incentives for U.S. business, particularly
manufacturing but also services and high-technology companies,
to shift production, services, research and technology abroad.
Tax incentives which reward relocation abroad should be
removed from the tax code as soon as possible.
·
"The Administration should undertake
a comprehensive review and reformation of the government's
trade enforcement infrastructure in light of the limited
efforts that have been directed at enforcing our trade laws.
Such review should include consideration of a proposal by
Senator Hollings at our hearing to establish an Assistant
Attorney General for International Trade Enforcement in
the Department of Justice to enhance our capacity to enforce
our trade laws. Moreover, the U.S. Government needs to
place a renewed emphasis on enforcement of international
labor standards and appropriate environmental standards.
·
"If we experience new surges of imports
that threaten the U.S. steel industry, the United States
should claim a national security exemption under Article
XXI of the WTO for the steel industry because of its importance
to our military manufacturing sector and our national security.
·
"The leadership and appropriate committees
of Congress should convene a summit of leaders of the textile
industry, its workers and their representatives, impacted
communities and others to help define the crisis in the
domestic textile and apparel industry as it related to trade
with China and to define a plan of action to help address
predatory trade practices and ensure that domestic capabilities
exist to meet our nation's economic and national security
needs in this important area. As part of that effort, the
Summit should:
- Review recently completed free trade
agreements and those under negotiation so as to avoid
loopholes such as that present in the Central American
Free Trade Agreement (CAFTA) that grant the Chinese
textile industry the opportunity to circumvent American
safeguard and tariff provisions.
- Examine Customs Service efforts to
monitor and inspect shipments of textile and apparel
imports to ensure that the law is being appropriately
enforced and determine what increases in resources are
necessary to protect the rights and interests of the
industry and its workers.
·
"A new type of education program
should be enacted for long-term and effective adjustment
to the employment impacts of outsourcing and relocation
abroad. Further, a series of federal and local training
programs in coordination with private U.S. firms aimed at
tailoring education to meet future needs should be developed."
For the full set of recommendations and
Commission commentary, please consult the hearing record.
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