Senator Blanche Lincoln Testifies Before ITC on Chinese Tire Imports

June 3, 2009 -- Washington – In testimony before the International Trade Commission Tuesday, U.S. Senator Blanche Lincoln (D-Ark.) said Arkansas’s workers are entitled to compete on a fair playing field in our global marketplace.

Lincoln, testifying on behalf of Cooper Tire & Rubber Company employees in Texarkana, expressed support for a United Steelworkers (USW) petition filed earlier this year seeking relief from surging imports of consumer tires from China.

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“I believe in the benefits of trade and am a strong supporter of opening up new markets for American businesses and consumers,” Lincoln said. “But we must be able to rely on internationally recognized rules, including trade remedies, to counter the harmful effects of unfair trade practices and unforeseen import surges that inflict injury on our domestic industries and its workers. Our domestic businesses and producers should be able to trust the government to level the playing field when our trading partners fail to abide by the rules, and I have long argued that we need to step up enforcement of our trade laws.

“President Obama has signaled that the United States will stay engaged as a leading trading nation. He has promised to enforce trade laws more vigorously and to promote America’s interest in the welfare of workers and the protection of the environment. I believe an affirmative determination of injury in this case, and a recommendation for the import relief the USW seeks in their petition, will enable him to make good on that promise.”

According to the USW, nearly 46 million consumer tires worth more than $1.7 billion were exported from China to the U.S. last year, making it the largest source of imports on consumer tires. From 2004-2008, imports from China soared more than 200 percent in volume and nearly 300 percent in value. These imports have caused great concern for the future of the U.S. tire industry and its jobs.

Under Section 421 of the Trade Act of 1974, relief may be granted if a surge of Chinese imports causes or threatens to cause market disruption to domestic producers. The International Trade Commission (ITC) conducts a hearing, proposes relief where appropriate, and a final determination is made by the President.

Lincoln’s remarks as prepared for delivery

“Madame Chairman, Members of the Commission, I appreciate the chance to testify today and to express my support for the United Steelworkers petition before you.

“I am here because I believe the workers at the Cooper Tire & Rubber Company facility in Texarkana, Arkansas are entitled to compete on a fair playing field in our global marketplace.

“As some may recall, I have been here on other occasions. In 2005 I testified in support of the last Section 421 petition on circular welded non-alloy steel pipe which resulted in a 4-2 affirmative determination. I was disappointed when President Bush did not follow through on your recommendation and grant relief.

“As you may know, I formerly chaired the Senate Finance Subcommittee on International Trade and Global Competitiveness. In that position and in my years in public service, I have become well acquainted with the important role trade plays in our economic life.

“I believe in the benefits of trade and am a strong supporter of opening up new markets for American businesses and consumers.

“Trade has benefited my home state, Arkansas. One in ten manufacturing sector workers in my state depends on exports.

“Some 1,300 companies in Arkansas export nearly $6 billion worth of merchandise to countries around the world each year – everything from chemicals to food products to motors.

“On the import side, consumers in my state and across the country benefit by having a wide range of choices of affordable goods.

“To note, I am not opposed to trade with China. I supported Permanent Normal Trade Relations with China, and Trade Promotion Authority.

“However, I also recognize that trade has an adverse impact. Trade can disrupt and dislocate people. Global competition can throw people out of work almost overnight and quickly overwhelm entire sectors and communities.

“Fortunately, we have in place mechanisms for coping with these market realities.

“When we trade, we must rely on internationally recognized rules, including trade remedies, to counter the potentially harmful effects of unfair trade practices and unforeseen import surges that inflict injury on our domestic industry and its workers.

“I strongly believe that domestic businesses and producers should be able to trust the government to do what it is required to do when it comes to leveling the playing field and protecting them when our trading partners fail to abide by the rules. I have long argued that we need to step up enforcement of our trade laws.

“One challenge we face is that our trade enforcement mechanisms fail to provide timely relief. Our trading partners know our rules and know how to game the system until it is too late for the workers, farmers, ranchers, or companies that have been adversely affected. Section 421 is an exception to this weakness. It creates a speedy and necessary process to review the facts and deliver relief.

“I voted to establish this 421 safeguard in conjunction with my support for China PNTR in 2000. I thought it made sense to bring China into the rules-based trading system that could help bring greater accountability to its trade practices and encourage greater compliance over time with the world trading system. As an elected representative of working people in my state, I thought it imperative to put the brakes on China in such a situation as the one presented in the petition under consideration today.

“Of course, trade remedies are only useful if they are applied. On four occasions, this Commission recommended import relief under Section 421 and the previous administration rejected your advice. That is unfortunate. I am hopeful that history will not repeat itself.

“I have faith that you and your able staff to carry out a thorough and objective review. The facts in the petition before you today paint a stark picture of injury from an import surge and illustrate exactly what Congress had in mind when it created this safeguard.

“From 2004 to the end of last year, imports of passenger vehicle and light truck tires went up a staggering 295 percent in terms of dollar value and 215 percent in terms of volume. During this same period, domestic production dropped significantly. Altogether, since this surge started, six plants have closed and up to 4,400 workers face job loss. I am very concerned that if nothing is done the surge will swallow up more jobs and wipe away more of our manufacturing base.

“In Texarkana, over 1,700 workers produce over 31,000 tires per day of the kinds of tires covered in this petition. Their jobs continue to be especially vulnerable to a continued surge of these products from China. Each job loss touches a family, a neighborhood, and indeed, the entire community.

“Texarkana has just over 30,000 people. The loss of jobs in this sector would ripple through this community and negatively impact coffee shops, retailers, and service providers throughout Texarkana. An affirmative determination that validates the union’s petition is of critical importance not only to the tire workers at the Cooper facility but to those across this great nation as well. Of course, it must be accompanied by meaningful relief recommended by you and adopted by our President.

“We are living through a time when more and more people continue to lose faith in trade. Currently, only a minority of Americans only believe free trade presents an opportunity for economic growth. I believe one reason people are losing faith in trade is because they are losing faith in their government’s ability or willingness to enforce rules and use tools such as the 421 safeguard.

“We need to make sure our trade remedy laws work effectively to level the playing field for our workers.

“President Obama has signaled that the United States will stay engaged as a leading trading nation. He has promised to enforce trade laws more vigorously and to promote America’s interest in the welfare of workers and the protection of the environment. I believe an affirmative determination of injury in this case, and a recommendation for the import relief the USW seeks in the petition, will enable him to make good on that promise.

“Thank you for this opportunity to support the hard working men and women in my state. I appreciate your consideration of the views I have expressed today.”

Source: Senator Blanche Lincoln