Dems Say Auto Industry Hurt By Trade Policies, Currencies.

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Author: Goode, Darren

Trade

Senate Democrats today blamed a weakening U.S. auto industry on "fundamentally unfair" trade policies with Asia and a failure to hold Asian countries accountable for manipulating their currency. "We have no policies that are fighting for American jobs like other countries," Sen. Carl Levin, D-Mich., said at a hearing today by the Senate Democratic Policy Committee. Lawmakers and both union and industry representatives from the auto industry said U.S. trade policies with China, South Korea and other countries over multiple presidential administrations, as well as the failure to crack down on Asian currency depreciation, can be partially blamed for recent announcements by Ford and GM that each will cut roughly 30,000 jobs.

"I believe we are literally in a fight for our way of life," said Sen. Debbie Stabenow, D-Mich., who has introduced legislation with Sen. Lindsey Graham, R-S.C., and Senate Finance ranking member Max Baucus, D-Mont., to establish a chief trade prosecutor's office that would go after auto parts counterfeiters and countries that manipulate their currencies.

Democrats blamed the GOP-led Congress for not holding oversight hearings on the auto trade imbalance and not moving legislation to crack down on currency manipulation. But Democratic Policy Committee Chairman Byron Dorgan of North Dakota also criticized a Clinton administration-era bilateral trade agreement with China reached in 2000 that led to China's acceptance into the World Trade Organization. That agreement requires the United States to pay tariffs 10 times higher than China for exporting automobiles between the two countries. "I would love to find the name of the American negotiator who agreed to that nonsense," Dorgan said. "It is unbelievably ignorant for us to have negotiated that proposal."

There is also concern that potential Bush administration free trade talks with Thailand, the second largest pickup truck producer in the world, and South Korea might worsen the imbalance. Japan, for example, has moved a large portion of its pickup truck industry to Thailand. "You're not just sitting down with the Thailand government, you're sitting down facing the Japanese auto industry," said Stephen Collins, president of the Automotive Trade Policy Council, which represents GM, Ford, and Daimler Chrysler. South Korea last year exported 737,000 vehicles to the United States compared to 4,200 vehicles sent from the United States to South Korea. "Is that a fair trade situation? Of course not. It doesn't make any sense at all," Dorgan said.

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By Darren Goode