WASHINGTON, D.C. — Today, U.S. Sen. Sherrod Brown (D-OH) chaired a hearing of the Congressional-Executive Commission on China (CECC) to call on the Chinese government to stop abdicating its obligations to the World Trade Organization (WTO), of which it has been a member of for more than 12 years. The hearing comes on the heels of the United States Trade Representative’s (USTR) 2013 Report to Congress on China’s WTO Compliance. That report found that during “most of the past decade, the Chinese government emphasized the state’s role in the economy, diverging from the path of economic reform that had driven China’s accession to the WTO.”

“China must comply with its World Trade Organization commitments and implement WTO rulings against it,” Brown said. “China has been a member of the World Trade Organization for more than 12 years. That is too long to wait for China to accede to WTO’s Government Procurement Agreement and end unfair trade practices like illegal subsidies, currency manipulation, and technology transfer requirements. Every month and year that China stalls on its international trade commitments means more harm to our economy and workers.”

According to the USTR report, China’s refusal to meet its WTO obligations includes subsidizing its state-owned enterprises and favoring industries at the expense of foreign competition; weak enforcement of intellectual property rights; retaliation for U.S. trade actions; and a lack of transparency, to the detriment of the United States and the Chinese people.

At the hearing, Brown specifically expressed concern over allegations from Ohio-based steel producer, AK Steel, that it has been hurt by China’s failure to comply with a WTO ruling on grain oriented flat-rolled electrical steel (GOES). Earlier this week, Brown applauded the USTR decision to defend AK Steel in this case, which would particularly benefit 150 workers at AK Steel’s Zanesville, Ohio factory; as well as 140 workers at Allegheny Technologies’ Louisville, Ohio factory. Further, if China made quicker progress in acceding to the WTO Government Procurement Agreement, an estimated $100 billion in government contracts would open to competition from U.S. businesses.

Finally, China continues to illegally misalign its currency, which has crushed the American economy while widening the U.S. trade deficit with each passing year. That is why Brown authored the Currency Exchange Rate Oversight Reform Act, bipartisan legislation that would stand up for American manufacturers when countries like China cheat trade law by manipulating its currency. Specifically, the bill would use U.S. trade law to counter the economic harm to U.S. manufacturers caused by currency manipulation, and provide consequences for countries that fail to adopt appropriate policies to eliminate currency misalignment.

A December 2012 report by the Peterson Institute for International Economics concluded that currency manipulation by foreign governments had cost the U.S. from 1 million to 5 million jobs and increased the U.S. trade deficit by $200 billion to $500 billion per year. The Economic Policy Institute found that if China was to revalue the yuan to its equilibrium level, and other Asian countries followed suit, the creation of 2.25 million American jobs could be supported. EPI also estimates that ending currency manipulation would increase Ohio’s jobs total by between nearly 95,000 and nearly 200,000; increase Ohio’s gross domestic product by between $8.26 billion and $17.41 billion; and increase Ohioans’ salaries by between $4.72 billion and $9.94 billion.

Today’s hearing featured testimony from:

  • David Horn, Executive Vice President and General Counsel, AK Steel Holding Corporation;
  • Elizabeth Drake, Partner, Stewart and Stewart;
  • Thea Lee, Deputy Chief of Staff, President's Office, American Federation of Labor and Congress of Industrial Organizations; and
  • Timothy Webster, Assistant Professor of Law; Director, East Asian Legal Studies, Case Western Reserve University School of Law

The CECC is a bipartisan commission made up of Senators, House Members, and senior Administration officials. The Commission was created by Congress in October 2000 with the legislative mandate to monitor human rights and the development of the rule of law in China, and to submit an annual report to the President and Congress. The Commission’s Web site is www.cecc.gov.

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