H.R. 4808, The Unfair Chinese Automotive Tariff Equalization Act

Congressional Record - United States House of Representatives
April 5, 2006

The SPEAKER pro tempore. Under a previous order of the House, the gentleman from North Carolina (Mr. JONES) is recognized for 5 minutes. Mr. JONES of North Carolina. Mr. Speaker, I would like to submit in its entirety for the RECORD a letter from the United States Business and Industry Council at the conclusion of my remarks, but I will be reading from parts of this letter.

Mr. KILDEE and myself have introduced H.R. 4808, the Unfair Chinese Automobile Tariff Equalization Act. I am going to read several paragraphs from this letter that I will submit. It is a letter to me from Mr. Kevin Kearns, President of the United States Business and Industry Council.

‘‘Dear Representative JONES: On behalf of the 1,500 U.S. companies comprising the U.S. Business and Industry Council, I am writing to express our strong support for H.R. 4808, the Unfair Chinese Automobile Tariff Equalization Act.

‘‘Equalizing U.S. and Chinese tariffs on passenger cars, as the bill would require, is an important and greatly overdue step toward restoring equitable competition in both U.S.-China trade and global automobile trade. Such competition in turn is essential to restoring the health of the U.S.- owned automotive sector, which makes us such a large share of our economy and which has undergirded the American middle class for so many decades.’’ I am going to skip on with paragraphs, Mr. Speaker. Again, I have asked that this entire letter be submitted for the RECORD.

‘‘In fact, according to the latest data available, imports have grabbed twothirds of the domestic U.S. auto market in 2004, up from 50 percent just 7 years earlier. Small wonder that Ford and GM are downsizing as fast as they can.

‘‘Much of the blame clearly falls on incompetent trade policies, many of course supported by Detroit itself in a triumph of shortsightedness. Presidents of both parties have signed numerous free trade agreements over the years. But despite the promises made to sell them to an increasingly skeptical public, they have manifestly failed to open foreign markets for U.S. producers, or even to limit predatory foreign commercial practices such as subsidizing, dumping, and exchange rate manipulation.

‘‘In fact, the trade flows clearly shows that the main new accomplishments of these trade agreements have been to help U.S. and foreign-brand automakers alike supply the American market from low-wage export platforms like Mexico.

‘‘As symbolized by the ludicrously unequal auto tariffs left in place by U.S. negotiators of China trade deals, U.S. policy on automotive trade with China is speeding down the same road and will likely produce the same results. The United States still runs a small trade surplus in autos with China, but since 2000, Chinese auto exports to the United States have outpaced the United States vehicle exports to China by a four-to-one ratio.

‘‘The Unfair Chinese Automotive Tariff Equalization Act can begin reversing this process and help put the U.S.-owned auto industry and the domestic manufacturing base as a whole back on the path of high-wage growth not low-wage stagnation. And the time to pass it is now, before the Chinese export drive takes off.’’

Mr. Speaker, the close on this letter is, ‘‘We strongly urge prompt House and Senate passage, and we will do everything we can to help make it the law of the land.’’

Mr. Speaker, I also want to mention that the Chair of the caucus known as the House Automotive Caucus has urged Members of this House to support 4808 that is signed by Mr. KILDEE and Mr. UPTON, and we are asking just fairness in this trade issue. That is all we are asking, is that the Congress send a message to the trade negotiators that we in this Congress want our manufacturers and our workers to be treated fairly. That is all we are asking in 4808 is to send a message.

If we could get this bill to the floor of the House and pass this legislation, we would say to our trade negotiators that we need you, the trade negotiators, to make sure that we have fair trade as it relates to the American worker and the American manufacturers.

With that, Mr. Speaker, I want to thank you for this time, and I want to close by asking God to please bless our men and women in uniform, and to ask God to please bless the families and to ask God to please bless America.

UNITED STATES BUSINESS AND INDUSTRY COUNCIL,
Washington, DC, Mar. 9, 2006.
Congressman WALTER JONES,
House of Representatives,
Washington, DC.

DEAR REPRESENTATIVE JONES: On behalf of the 1,500 domestic U.S. companies comprising the U.S. Business and Industry Council, I am writing to express our strong support for H.R. 4808, Tbe Unfair Chinese Automotive Tariff Equalization Act.

Equalizing U.S. and Chinese tariffs on passenger cars, as the bill would require, is an important and greatly overdue step toward restoring equitable competition in both U,S.- China trade and global automotive trade. Such competition in turn is essential to restoring the health of the U.S.-owned automotive sector, which makes up such a large share of our economy, and which has undergirded the American middle class for so many decades.

For many years, America’s trade performance in passenger cars has been nothing less than disastrous. Despite the proliferation of foreign transplant factories throughout the country, the United States ran a $101.8 billion trade deficit in autos and light trucks in 2005. U.S. imports of these products last year, which totaled more than $126 billion, represented fully 84 percent of two-way global U.S. vehicle trade.

In fact, according to the latest data available, imports had grabbed two-thirds of the domestic U.S. auto market in 2004, up from 50 percent just seven years earlier. Small wonder that Ford and GM are downsizing as fast as they can.

Much of the blame clearly falls on incompetent trade policies (many, of course, supported by Detroit itself in a triumph of short-sightedness). Presidents of both parties have signed numerous free trade agreements over the years. But despite the promises made to sell them to an increasingly skeptical public, they have manifestly failed to open foreign markets for U.S. producers, or even to limit predatory foreign commercial practices such as subsidization, dumping, and exchange-rate manipulation.

In fact, the trade flows clearly show that the main new accomplishments of these trade agreements have been to help U.S.- and foreign-brand automakers alike supply the American market from low-wage export platforms like Mexico.

As symbolized by the ludicrously unequal auto tariffs left in place by U.S. negotiators of China trade deals, U.S. policy on automotive trade with China is speeding down the same road, and will likely produce the same results. The United States still runs a small trade surplus in autos with China. But since 2000, Chinese auto exports to the U.S. have outpaced U.S. vehicle exports to China by a four-to-one ratio.

Yet it is vital to realize that the development of China as an automotive export platform has only just begun. Vehicle makers from all over the world (Japan, Europe, the United States, and China itself) are building far more auto production capacity in the People’s Republic than the Chinese market can possibly absorb. And since China desperately needs to create jobs to keep politically explosive unemployment in check, Beijing has no interest in preventing or even slowing this production glut. Indeed, to reduce joblessness, it has every interest in encouraging overproduction and exporting the surplus. The United States, the world’s largest single national automotive market, and the most open major market by far, is the most promising destination.

Chinese auto makers, who frequently steal U.S. know-how outright or force their U.S. partners to transfer it, have already announced plans to sell hundreds of thousands of vehicles in the United States by 2012. And foreign auto makers in China (including U.S. multinational companies) will jump on the export bandwagon as well.

The bottom line is that, without dramatic changes in U.S. trade policy, China’s inevitable emergence as an auto export power will either further undermine U.S.-owned, U.S.- based auto production, or it will permit such production to survive only on a greatly reduced scale, and with a dramatically lower pay structure.

The Unfair Chinese Automotive Tariff Equalization Act can begin reversing this process, and help put the U.S.-owned auto industry and the domestic manufacturing base as a whole back on the path of high-wage growth not low-wage stagnation. And the time to pass it is now, before the Chinese export drive takes off.

We strongly urge prompt House and Senate passage, and we will do everything we can to help make it the law of the land.

Sincerely,

KEVIN L. KEARNS,
President.