Casey Calls on Obama Administration to Use Upcoming Trade Summit to Crack Down on China’s Unfair Trade Practices

Casey’s Letter Highlights Four PA Companies Hurt by China’s Practices on Currency, Intellectual Property, Rare Earth Metals

WASHINGTON, D.C. – U.S. Senator Bob Casey (D-PA) urged the Obama Administration to use an upcoming summit with China to crack down on the country’s unfair trade practices in a letter released today to Secretary of Commerce John Bryson and United States Trade Representative Ron Kirk.

In his letter, Senator Casey called on the Administration to address a host of issues where China is currently flouting international trade laws to the detriment of Pennsylvania jobs and businesses: currency manipulation, intellectual property and the manipulation of the rare earth metals market.

“For far too long, China’s unfair trade practices have cost Pennsylvanians their jobs. It’s time for the Administration to step up and take strong action against the Chinese,” Senator Casey said. “The Administration needs to send a clear and strong message to China: enough is enough. It’s time to put an end to unfair trade practices that ship jobs overseas and hurt our small businesses.”

Senator Casey has been leading the fight in the Senate to crack down on China’s unfair trade practices. Last month, Senator Casey helped push through a bill that would crackdown on China’s currency manipulation, and in March he called on the Obama Administration to increase scrutiny of China’s domination of the rare earth metals market.

“China’s policies continue to negatively impact Pennsylvania companies and workers while jeopardizing our fragile economic recovery,” Senator Casey wrote in his letter. “I am concerned that we have failed to use the limited tools at our disposal to aggressively confront the serious issue at hand.  I am pleased by the Senate’s recent action to pass tough legislation, which I introduced with a bipartisan group of colleagues, to crack down on China’s currency manipulation.”   

China’s history of flouting international trade laws has had real consequences for Pennsylvania businesses and families. A report from the Economic Policy Institute (EPI) finds that the U.S. trade deficit with China has resulted in the loss of 2.8 million jobs over the past decade (2001-2010), including almost 107,000 jobs in Pennsylvania. Pennsylvania manufacturer Zippo is forced to compete against counterfeit lighters that are manufactured in China and sold to U.S. consumers online. And in Latrobe, a Pennsylvania manufacturer, Kennametal has been hurt by China’s attempt to unfairly dominate the rare earth metals market.

In his letter, Senator Casey called on the Administration to use the unique opportunity of this summit to finally crack down on China’s unfair trade practices.

The full text of the letter is below:

The Honorable John Bryson

Secretary of Commerce

The Honorable Ron Kirk

United States Trade Representative

Dear Secretary Bryson and Ambassador Kirk:

I write to you today in anticipation of the upcoming U.S.-China Joint Commission on Commerce and Trade (JCCT).  As President Obama highlighted during last week’s Asia Pacific Economic Cooperation (APEC) Summit, the United States’ economic relationship with China is of utmost importance to our nation’s future.  Ahead of the upcoming trade summit, I would like to convey my continuing concern with China’s policies concerning currency valuation, intellectual property protection and price control of rare earth elements and other raw materials.  China’s policies continue to negatively impact Pennsylvania companies and workers while jeopardizing our fragile economic recovery. 

Chinese currency manipulation continues to be a top concern of Pennsylvania manufacturers.  Given the impact on our exporters, I have long advocated using every tool at our disposal to confront the undervaluation of the Yuan.  Specifically, I have called on Treasury to list China as a currency manipulator, asked Commerce to view currency manipulation as a countervailable subsidy and wrote to the President urging him to weigh in directly with President Jintao.  I am concerned that we have failed to use the limited tools at our disposal to aggressively confront the serious issue at hand.  I am pleased by the Senate’s recent action to pass tough legislation, which I introduced with a bipartisan group of colleagues, to crack down on China’s currency manipulation.  China’s efforts to date are insufficient.  Without meaningful appreciation, I am certain we can gather the support necessary to pass currency legislation out of Congress. 

In addition to currency manipulation, China’s failure to protect intellectual property rights remains a persistent barrier to fair trade with the United States.  Our Nation’s greatest advantage is its ability to innovate, invent, and imagine.  The lack of strong intellectual property protections directly threatens businesses throughout the United States.  Pennsylvania is no exception; Pennsylvania companies like Comcast Corporation invest heavily in the production and distribution of a wide variety of news and entertainment programming.   Widespread piracy in countries like China reduces the ability of legitimate distributors and copyright holders to make a return on those investments, and thus threatens future investments in this vital sector of the U.S. economy.  Violations of intellectual property rights also affect more traditional manufacturers.  The Zippo Manufacturing Company in Bradford, Pennsylvania, is forced to compete against counterfeit lighters copied in China and sold online to customers around the world.  C.F. Martin & Co., the world-renowned guitar maker headquartered in Nazareth, Pennsylvania, is another example.  Martin & Co. has been fighting to register its mark with the Chinese government.  A Chinese individual has stolen the Martin mark, registered the mark in China and sold guitars under the stolen mark at the Shanghai International Musical Instrument Exhibition, one of the world’s largest guitar trade shows.  Sales of counterfeit, low-quality merchandise hurts Pennsylvania companies and workers.

Lastly, I would like to draw your attention to the impact Chinese price controls on rare earth elements and other raw materials have on Pennsylvania businesses.  The situation facing Kennametal, a Latrobe, Pennsylvania, manufacturer offers a good example.  The key raw materials for Kennametal’s products are tungsten, tungsten Carbide and tungsten oxides.  As with a number of other essential component elements, the world tungsten supply is dominated by Chinese production and exports with 85 percent of the world’s supply mined in China.  In recent years, China has been steadily raising the prices on these products, which directly impact Kennametal’s costs of production.  While the European Union has removed import duties in response to price hikes, the United States continues to level import duties on these products placing a further cost on the company.  Kennametal is not alone.  Many manufacturers face these issues, which will eventually push jobs out of the United States.  I would like to work with the Department of Commerce and the Office of the Trade Representative to formulate a comprehensive policy response to these issues.

Thank you for your attention to these issues.  A strong manufacturing base is essential to our economy.  Trade enforcement is critical to supporting American companies as they compete across the globe.  I look forward to hearing from you following your trip to China. 

Sincerely,

Robert P. Casey, Jr.

United States Senator

###