NORWICH – With bipartisan support, the nation’s need for jobs and trade negotiations topping Congress’ fall agenda, U.S. Sen. Charles Schumer, D-N.Y., said a bill he introduced six years ago is finally on track to pass in the Senate, perhaps as early as today.
The Currency Exchange Rate Oversight Reform Act of 2011 would crack down on China’s unfair trade practices that, according to Schumer, have given the country’s manufacturers a 30 to 40 percent cost advantage and left too many American’s out of work.
“They’ve been skirting trade laws and keeping their currency artificially low ... paying their workers next to nothing,” he said in a press call Wednesday.
For upstate New York, the Senator pointed to an Economic Policy Institute study that found nearly 75,000 jobs have been lost over the past decade to Chinese companies. In the 24th Congressional District, which encompasses Chenango County, 5,477 jobs were lost.
The EPI study states that passing the trade act could create 2.25 million American jobs over the next several years.
Neither the Bush nor the Obama administrations have backed the Senator’s legislation in the past, however, and the bill faces a less-certain future in the House of Representatives where Speaker John Boehner, R-Ohio, has opposed it, saying it could ignite a trade war.
Nevertheless, Schumer said he hoped the Senate would send a strong message to the House that “the gig is up in China and no longer will Uncle Sam become Uncle Sap.”
Speaking on Schumer’s conference call with reporters were representatives from Bitzer Scroll of Syracuse, Brewster Plastics of Patterson, and XLI of Rochester – three companies that have lost out to Chinese companies when competing for manufacturing contracts. Bitzer Scroll General Manager Mike McKee said his customers demand the same China pricing globally.
“It becomes harder and harder for an American manufacturer to grow when its Chinese competitors can export to the U.S.A. at little or no import duties, while charging very high import duties for the same American made product to be shipped into China,” he said.
When Bitzer Scroll, a scroll compressor producer, ships their compressors to China, there are 23 percent higher costs made up of total import duties and value-added taxes. When China ships into the U.S., there aren’t any duties or value-added tax added to the costs. Bitzer Scroll competes with Danfoss, a firm that moved its factory from Georgia to China, which is able to supply their largest customer, Carrier Corporation, with competitive product at 20 percent below Bitzer’s lowest price. The move to China allows them to now service the Chinese market competitively (without paying import duties) and service the U.S. market with a lower cost Chinese product. Bitzer Scroll, Inc. currently sells to Johnson Controls, York Division. Due to York’s expansion into the Chinese market, they are requiring that Bitzer move manufacturing to China in order to avoid the 23 percent import duties or they will be forced to move to another manufacturer in China. This reduces volume produced within the company’s Syracuse manufacturing facility.
“Make no mistake about it – New York companies can compete against anybody and win when playing by the same rules. We have one of the most hard working, capable work forces anywhere in the world, but China’s currency manipulation has severely and unfairly weakened this country’s manufacturing sector,” Schumer said.