Representing North Carolina’s Ninth District                                                                        

Trade Action a Good First Step

I believe in free trade because it opens up more markets for our businesses to sell their goods. However, free trade is only good if trade laws are ENFORCED.

I have been working with leaders in the manufacturing and textile industry to address the challenges facing their industries because of China and other countries. We are working to enforce the trade laws we have with China, and force it to stop its deceptive trade practices.

These deceptive trade practices include using a method called transshipment, where counties such as China ship their goods through other countries in order to avoid US duties and quotas. I have worked with my colleagues in Congress to address this concern by funding the creation of a textile tracer, which could determine the true origin of textile apparel coming into the US. In addition, I have also secured $9.5 million in funding to hire additional custom agents to guard our borders against these illegal textile goods coming in from other countries.

Another huge problem for the textile and manufacturing industry is Chinese currency manipulation. China is manipulating its currency somewhere between 15-40%. This reduces the cost of Chinese imports here in America, while making our goods more expensive in China. The result has been thousands of lost jobs and a huge increase in America’s trade deficit. I have introduced a bill that would impose a tariff of 27.5%, the average estimate of China’s currency manipulation, to convince China that it must float its currency on the open market.

In addition to the issues listed above, the textile industry is facing many other trade issues with China. The industry has been facing tough times, but I was very pleased this week when good news came from the Bush Administration. They have decided to impose "safeguards" on certain Chinese textile imports.

When China joined the World Trade Organization, it agreed to certain safeguard provisions established to ensure that it would not dump excessive goods into our markets. China understood that this safeguard would be implemented if there was ever a "market disruption threatening to impede the orderly development of trade."

This trade disruption has been happening at a rapid pace. Between 2000 and 2003, knit fabric imports from China increased 20,723 percent! The rest of the world fabric imports increased by only 39 percent. Dressing gowns and robe imports from Chinese increased 1,271 percent - the rest of the world increased 70 percent. And brassiere imports from China increased 276 percent - the rest of the world increased 21 percent.

The only way the textile industry could prevent China from dumping these goods was to ask the Bush Administration to implement the safeguards. These safeguards are a means to limit the growth of Chinese imports on specific textile goods to a rate as low as 7.5 percent. In order to obtain these safeguards, the industry had to file a petition earlier this year, requesting that the Bush Administration enforce the safeguards.

Without these safeguards, China would have continued to place a stranglehold on the textile industry. The American Textile Manufacturers Institute has released a study that predicts that if China captures 75 percent of the U.S. market, 630,000 textile and apparel manufacturing jobs will be lost, 1,300 plants will close, and $42 billion in U.S. market share will be shifted from other countries, including the United States, to China.

Due to the severity of the issue, 29 U.S. Senators and 144 U.S. Representatives, including the entire North Carolina congressional delegation, wrote President Bush and urged him to invoke the special textile China safeguard. I personally met with Secretary of Commerce, Don Evans, and Secretary of the Treasury, John Snow, to impress upon them the challenges facing the textile industry and the need to implement this safeguard.

This past Monday, the Administration heeded our advice and decided to implement safeguard relief on all three of the textile industry petitions (knit fabrics, dressing gowns and robes, and bras). For the first time in many years and many Administrations, this Administration has stood firm and enforced the trade laws on the books.

These safeguards are extremely important to the textile industry because they will help stem the bleeding that the industry is experiencing. The industry and its workers can now have hope that the Bush Administration will continue to take efforts to ensure that they can have a fair and level playing field.

I believe that fair trade is the key to competition in this global economy, and I am working hard to make sure that our free trade agreements are ENFORCED so that we can have fair trade. We still have much work to do on China’s currency manipulation and the transshipment issue, but we are making very positive steps in the right direction thanks to the implementation of these safeguards.

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