Graves: China Trade Must Be Fair
Graves: China Trade Must Be Fair
(Washington, D.C) Chairman Sam Graves of the House Subcommittee on Rural Enterprises, Agriculture, and Technology examined the impact of China's trade practices on American businesses. The Chairman said he was concerned that the Chinese were not playing by the same rules.
"Any trade with China has to be fair trade," said Graves. "China appears to be playing by a different set of rules which is fundamentally unfair."
Since 1994, the Chinese government has kept its currency pegged at 8.2 Yuan to the dollar. While in recent years, the dollar has weakened, the Yuan has remained the same against our currency. Economists estimate that the Yuan is undervalued by as much as 40 percent, which means Chinese manufactured goods are 40 percent cheaper than their competitors.
"The longer the exchange rate can be artificially deflated, the bigger the jump-start," said Tom Goodpasture the owner of Pride Manufacturing, a small machine shop in Liberty, MO. "I believe in fair trade, but let's keep it fair."
Theft of intellectual property rights is another significant problem that US companies face when dealing with China. Counterfeits are estimated to make up between15 - 20 percent of all products made in China and account for about 8 percent of China's GDP. It is also estimated that US companies lose $25 billion annually to copyright violations.
"One of the requirements for gaining trademark registration in China is that you must have a 'well know mark," testified David Blackburn, the President of Thomas G. Faria Corporation. "China recently determined that 'Toyota' was not a well-known mark."
Witnesses testified that while the Chinese have some laws that protect their workers and protect the environment, few are ever enforced. In contrast, U.S. companies are held to some of the highest standards in the world and these standards are noticeably absent in China. U.S. government regulations cost manufacturers more to comply with than any other industry, about $8,000 per worker.
"The cost of doing business is costing us businesses," said Graves. "The more rules and regulations that are piled on companies, the harder it is to stay in business."
Graves reiterated his commitment to keeping America the best place in the world to do business. The Congressman believes that issues involved in trading with China will get a strong look this session.
"There is strong support in Congress for changing our trade policy with China," said the Congressman. "American manufacturers can compete with anyone as long as it is fair."
http://www.house.gov/graves/newsroom/052605a.htm