Casey Urges Obama to Get Tough on China Ahead of Visit from Chinese Vice President

In Letter to President, Casey Cites PA Companies Harmed by Unfair Trade Practices

WASHINGTON, DC – Ahead of this week’s visit from Chinese Vice President Xi Jinping, U.S. Senator Bob Casey (D-PA) today sent a letter to President Obama urging him to address China’s harmful policies regarding currency manipulation, intellectual property protection and unfair price controls of rare earth elements and other raw materials.

“China’s unfair trade practices and economic policies are harming companies and costing jobs in Pennsylvania and across the country,” said Senator Casey. “I urge President Obama to address these concerns with the Chinese Vice President and pursue the aggressive policies I have advocated to give Pennsylvania workers and manufacturers a chance to compete.”

Vice President Xi is widely expected to become more influential in China, possibly as the next President, making this week’s meeting with President Obama especially important.

In his letter, Senator Casey pointed to several Pennsylvania companies that have been hurt by China’s unfair trade practices and economic policies, including Kennametal in Latrobe, Zippo in Bradford and Comcast, based in Philadelphia.

The full text of Senator Casey’s letter is below:

Dear Mr. President:

I write to you today in anticipation of Chinese Vice President Xi Jinping’s visit this week.  As you have highlighted, the United States’ economic relationship with China is of utmost importance to our nation’s future.  In anticipation of your upcoming meetings, I would like to convey my strong commitment to the enforcement of our trade laws and encouragement for further tough action on China’s harmful policies concerning currency valuation, intellectual property protection and price control of rare earth elements and other raw materials. 

The budget submitted to Congress this week shows a welcome focus on trade enforcement.  I hope that the newly formed International Trade Enforcement Center (ITEC) will step up efforts to push China to play by the international rules.  As you know, it is only through vigilant enforcement that we will see any progress on longstanding trade issues that have hurt workers and companies in Pennsylvania.  To that point, I would urge your administration to work with Congress to find a legislative solution to recent adverse decisions in U.S. courts and the WTO that threaten our ability to properly impose countervailing and antidumping duties on products from China. These remedies help U.S. companies who are competing against state-supported companies that are seeking to harm U.S. producers, from China and elsewhere, and must not be weakened.

As I have argued in past communications, Chinese currency manipulation continues to be a top concern of Pennsylvania manufacturers.  By the Department of the Treasury’s own conclusion, China continues to advance policies that undervalue its currency at the expense of American manufacturers.  Specifically, China continues to buy dollars to inflate their value and to keep its own currency weak.  According to the Treasury Department’s December 27, 2011 International Economic and Exchange Rate Policies report by the end of September 2011, China held more than $3.2 trillion in foreign exchange reserves, the large majority of these holdings in US dollars.  I am pleased by the Senate’s passage of tough legislation, which I introduced with a bipartisan group of colleagues, to crack down on China’s currency manipulation.  I will continue to work with my colleagues to gather the support necessary to pass currency legislation out of Congress. 

The lack of a strong, shared framework for intellectual property rights remains a persistent barrier to fair trade between China and the United States.  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.  Sales of counterfeit, low-quality merchandise hurt 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.  In recent years, China has been steadily raising the prices on key inputs, which directly impact Kennametal’s costs of production.  Faced with aggressive price hikes, companies have little recourse.  China’s control of key input materials threaten domestic advanced manufacturing and must be addressed if we intend to continue to grow our manufacturing sector. 

Thank you for your attention to these concerns. 

Sincerely,

Robert P. Casey, Jr.

United States Senator

###