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                            Tricom Associates Conference Call
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Operator:        Good day everyone. Thank you for holding and welcome to the EPI China
                 Trade Loss Study Conference Call with your host Scott Paul, Executive
                 Director of the Alliance For American Manufacturing. Today's conference
                 will begin with a presentation and then a question and answer session.
                 Instructions on that feature will follow later in the program. I would now like
                 to turn the call over to Scott Paul, please go ahead sir.


Scott N. Paul:   Good afternoon everyone. Thank you for joining us, I’m Scott Paul of the
                 Alliance for American Manufacturing, I’m the Executive Director. AAM is a
                 labor management partnership between the United Steel Workers Union and a
                 number of Fortune 500 manufacturers who are committed to keep jobs in
                 United States.


                 I'm honored to be joined on this call by Senator Lindsey Graham of South
                 Carolina. Senator Charles Schumer of New York will be joining us
                 momentarily and Dr. Robert Scott of the Economic Policy Institute, who is the
                 author of the report. I’m going to make a very brief introductorian remark and
                 turn over the call to Senator Schumer.


                 First I want to make sure everyone knows they can access the report today
                 from the economic policy institute website which is epi.org. They can access
                 an interactive map that drills down into industry congressional district and
                 state data on our web site, which is americanmanufacturing.org.


                 China is emerging as an important job issue for the following reasons,
                 unemployment still stands near 10%, it’s the top of mind issue for voters that
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                  is jobs in the economy, and voters are frankly angry and discouraged about the
                  employment prospects for their own households as well as their children.


                  It is clear that China is playing an increasing role in job loss in the United
                  States, we have lost 50,000 manufacturing facilities over the last decade.
                  China's share of our overall manufacturing trade deficit when you exclude oil
                  is now over 80%. And if this study, and this map doesn’t help move the
                  China debate forward, I don’t know what will, because it shows across a
                  wider rage of wide array of industries from basic manufacturing to high-tech
                  semiconductors across every state, not only industrial Hartland, and the
                  industrial Heartland of the south, that also in places like California, Oregon
                  and Minnesota, we have seen massive job loss, in fact 2.4 million jobs lost
                  since China joined the world trade organization.


                  The question is what do we do about this? We strongly support efforts by
                  Senator Graham and senator Schumer and others to hold China accountable
                  for it’s currency manipulation. We believe that penalty should be able to post
                  in trade cases for currency manipulation. We think that China should be
                  designation as a currency manipulator, and we think that this should be an
                  issue that is the top of the bilateral agenda. I want to turn the call over now to
                  senator Lindsey Graham, who has been a long time leader of efforts to try to
                  hold China accountable, stop it’s cheating and have a much more rational and
                  balanced relationship, that will benefit workers and businesses in the United
                  States for any comments that he may wish to senator Graham.


Lindsey Graham: Thank you. I think a good word you take this topic up is use the rational line,
                  rational imbalance. It’s not lost upon maybe, the benefit that our country
                  could achieve with a good balance relationship with China. I want to have a
                  beneficial relationship with China, that’s mutually beneficial, obviously we
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                  receive goods from China that are low cost, it helps working people to be able
                  to purchase goods at a lower cost, but not under-but not at over cost.


                  One of the problems that I have with our relationship with China, is it their
                  economy is too large on the world stage to allow it’s government to
                  manipulate it’s currency. And currency manipulation is a trade advantage or a
                  marketplace advantage that tilts the marketplace to China's benefit unfairly. If
                  they can outperform a South Carolina company, or if they can do better job
                  delivering a service so be it. That’s not what's going on here. We have the
                  world trading market and the world economy skewed, because the Chinese
                  government clearly is manipulating the value of their currency. A lower
                  valued Chinese Yuan makes any product in China that’s produced in China
                  remarkably cheaper than the competition throughout the world.                 Some
                  estimate between 15% and 40% the amount of the Chinese currency under
                  valuation and this is general rules…


Charles Schumer: Hi everybody, this is Chuck Schumer sorry to be late, go ahead Lindsey.


Lindsey Graham: Thank you, I just finish but then I will turn it over to you. The general rules of
                  trade are being decide here you know, when you export a lot the value of your
                  money should adjust. Well, China is a huge exporter, and their currency is
                  unfairly pack (unintelligible) dollar is creating an imbalance when it comes to
                  trade, it’s creating an unfair advantage vis-à-vis manufactures who have to
                  compete with China, at the end of the day China is too big to be allowed to
                  have this advantage, and I have been working with senator Schumer for years,
                  they appreciated the one by about 20% when we put out the bill in 2005, but
                  they haven’t changed the value of the one at all since 2008. And the only
                  thing they seem to respond to is pressure, and at the end of the day we have
                  come up with a new approach, and I will Chuck describe this to you, but the
                  study is compelling and devastating.
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                  I have fully realized that the Chinese adjust their currency, some products
                  come from will be higher price here in America, but that’s a price worth
                  paying, because the price of losing all our jobs to this currency imbalance is
                  just unacceptable. So, we are trying to do something in a constructive way to
                  allow American manufacturing to be able to compete on the (unintelligible)
                  China and make it a win-win for both countries, and with that I will let Chuck
                  describe this new approach to no problem.


Charles Schumer: Hey Lindsey, have finished what you said, because I just - I’m sorry I was
                  late.


Lindsey Graham: Yeah, I’m - it’s all yours.


Charles Schumer: Okay, thank you everybody. First I want to thank my partner in this issues for
                  more than five years senator Graham, and I want to thank Scott Paul from the
                  Alliance for American Manufacturing, as you know back in 2005, senator
                  Graham and I introduced the first legislation to address kind of China
                  currency manipulation, and it got 67 votes, but at that time we were laughed
                  at, so many US denied there was an issue with China's currency, other
                  acknowledge there was a problem that called our bill an over reaction,
                  Lindsey catalogued a little of the history there, today we know better.


                  In this new report by the EPI shows how sever the problem, we have had over
                  the last decade, since 2001 America has lost 2.4 million manufacturing jobs
                  because of our trade gap with China, which is ballooned due to China's
                  undervalued currency. My home state of New York is one of the hardest hit,
                  we have lost a 1,40,000 jobs, we have known for years that US manufacturing
                  was paying a heavy price for China's activities, but these figures exceeded
                  even our worst expectations. And by the way it doesn’t measure the number
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    of jobs lost in service type industries, which also are effected of course by
    currency manipulation. So, we believe that we cannot ignore the impact of
    these jobs anymore, right now as you know, one in 10 workers is out of a job
    in America 15 million Americans if this report shows, that if China were
    playing by the same rules as the US 2.4 million of those workers might be
    collecting paychecks instead of job hunting, and that’s direct jobs, there would
    be more indirect jobs that would come about if these people were employed
    and exporting.


    And yet, just last week, the Chinese premier again rejected calls to let it’s
    country's currency flow, and that’s the last draw we are fed up, China's
    merchantuas policies are hearting the rest of the world, not just America, it
    help create the global recession that we are in. The Chinese want to be treated
    as a developing country, but they are global giant, the leading exporter in the
    world. So, here is what our bill does, first as you know, we pushed the bill
    previously in 2007, the pass the finance committee 20 to one, that bill
    imposed a serious of penalties including enabling the commerce department to
    factor in the misalignment when imposing duties on foreign goods under the
    US anti dumping law, at the same time, the senator Stab and Allen Brown
    pushed a different proposal, their bill instructed the commerce department to
    treat currency manipulation as a countervailable subsidy under US Trade Law,
    and commerce could then impose tariffs.


:   Last week we introduced a new bill that takes the best of these two different
    proposals, what we did is we took the wiggle room out, that had allowed
    treasury to turn to blind eye in the past when it comes to citing the Chinese,
    they will have to cite the Chinese, if the Chinese don’t change and there are
    legislation, and we impose additional penalties once the country, once treasury
    has cited a country for currency misalignment, we call it misalignment and
    Lindsey, if you have gone over some of this let me know.
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Lindsey Graham: No I haven’t, go ahead.


Charles Schumer: We call it misalignment, because we are no longer having to prove intent
                 manipulation implies intent, misalignment just implies a state of fact, and our
                 bill has gotten the Chinese attention as you know they sent a spokes person
                 over to refute the bill. Our view, the only thing that will make China move is
                 tough legislation.   We intend to move that legislation quickly.           We are
                 figuring out the best vehicle. We believe it will pass and the by part is in way
                 overwhelmingly and frankly in the past both democratic and republican
                 administration have turned a blind eye to this problem. This is - but I feel and
                 I know senator Graham does an urgency here. This is the future of America's
                 stake. If we continue to let the Chinese just manipulate currency, unfairly
                 export, keep out our imports, even of our best products. It's going to hurt
                 America in ways from which may never recover. I'm - I'm hopeful that our
                 legislation has sort of gotten the Obama administration to give this a second
                 look when they issue their currency report. But whatever they issue, we are
                 going to move forward. It is not we are tired of the Chinese not playing by the
                 rules that everyone else has to play by. Ready for...


Man:             Senator Schumer.


Charles Schumer: Yes.


Scott Paul:      It's - it's got poll with the alliance. Thanks so much for your comment, in 60
                 seconds Rob Scott briefly describe the report and then we will turn it over to
                 questions.


(Schumer):       Right.
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Scott Paul:        For you and senator...


(Schumer):         And I apologize for being late to everybody.


Scott Paul:        Exactly. Even senator (Graham), I know your schedules are very busy so
                   thank you. Rob.


Robert Scott Paul: Thank you (Scott). I will just hit the high points to save time for questions as
                   you have suggested. What we found is that the growing trade deficit between
                   the US and China has eliminated and displaced approximately 2.4 million jobs
                   in - in the United States since 2001, that’s between 2001 and 2008. We have
                   looked at the impact of this deficit on employment by state and for the first
                   time we have estimates also by congressional districts.            We have talked
                   already about some of the state numbers, some of the - some of the hardest hit
                   states in terms of overall numbers of jobs lost in California and Texas. Some
                   of the hardest hit states in terms of the share estate employment are states such
                   New Hampshire, which lost over 2.35% of it's employment, North Carolina
                   2.3, Massachusetts 2.25. These are very significant numbers of jobs in these
                   states. So overall we have also seen job loss concentrated particularly in areas
                   they were involved in or have been involved in high tech industries. We
                   found that approximately 40% of the - of the increase in the trading deficit
                   was in computer and electronic products. And that sector was responsible for
                   about 627,700 jobs lost, about more than a quarter of all the jobs displaced
                   between 2001 and 2008. The hardest hit districts were in Silicon Valley. The
                   14th, 15th, and 16th congressional districts. So with that I’ll - I’ll stop and
                   turn it over to Scott you can direct the questions.


Scott Paul:        Rob thank you. The call moderator will come on and describe how to get into
                   queue to ask questions for senator Graham, senator Schumer or the two of us.
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Operator:         Thank you. If anyone has a question please press one on your touchtone
                  phone. Our first question comes from (Chris Hopkins), the National Journal.


(Chris Hopkins): Yes. Thank you for holding this call gentlemen. Given that some portion of
                  the jobs lost are likely in the green technology sector, would you expect the
                  comprehensive energy bill to help address this problem? Thank you.


Charles Schumer: Well this is Chuck Schumer. Look this affect every sector and that’s the harm
                  of it. And we expect to push this legislation to affect every sector it will
                  certainly affect green jobs because America has some technological advantage
                  there.   But again our export-import balance is not very good.            But the
                  effectiveness of our legislation affects everything. High end products, low
                  end products, you name it. And just imagine if you had a store on - two stores
                  on opposite sides of the street and one just automatically got a 30% advantage
                  in terms of the sales price. How do you think people - where do you think
                  people would shop? That’s the problem here.


Man:              Well, that’s a good question. And, you know, I'm trying to find a way to
                  become energy independent, deal with the climbing issue I think the jobs of
                  the future in this country are going to come from independent - energy
                  independent and cleaning of the air. But China is a good example of a country
                  that made a decision to go into the alternative energy sector. About five years
                  ago they had 3% or 4% of the solar panel market. Today it's almost 45%.
                  They've made an put an emphasis on alternative energy solar panels, wind and
                  battery powered systems. But, yes I would like our country to have a national
                  energy plan that would (unintelligible) alternative energy. But as Chuck said,
                  if you allow the currency manipulation to continue, you are going to take one
                  step forward and two steps backward. So one of the reasons they have
                  increased the market share in alternative energy, particularly solar panels, as
                  they put an emphasize on it the other reasons, which is an unfair reason is that
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                 their currency manipulations allows those products to be artificially cheaper.
                 So given credit for having an emphasis over, you know, give us a bad marks
                 for not having a coherent policy. But you can’t allow them to grow their
                 market share in currency manipulation.        So if we took the currency
                 manipulation of the table, we will be more competitive in every sector
                 including green technology.


Man:             Thank you.


Moderator:       Thank you. Our next question comes from (Doug Palmer) from Reuters.
                 Your line is open.


(Doug Palmer):   Hi, thanks very much. I was just wondering if - if either of you would - would
                 be meeting with this Chinese vice-minister that - that coming this week. I
                 know he is having meetings with administration officials. And I also wonder
                 if you could be a little more specific on when your bill, you know, might
                 come to the forward. Do you think that could come up after the - after the
                 Easter recess and before the strategic and economic dialogue meeting in late -
                 in late May?


Charles Schumer: Well, speaking for me, the sooner the better. We are just sick and -- you
                 know, what, my belief is China will not do anything unless they required to.
                 And everyday we wait is a day we lose wealth, we lose economic advantage,
                 we lose jobs.


Man:             Well I would just add to that. The history is pretty clear here, in 2005, we
                 introduced our legislation and we get 67 votes for a tier off. (Chuck) and I
                 back off hoping the message would be received by the Chinese. They did
                 allow appreciation of a one for a few years I think about 20% since 2005.
                 And nothing has happened since 2008, so it's clear to me that the only reason
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                   they allowed their currency to - to be revalued. Oh it got various legislations.
                   Yes, I will meet with the representatives from China, I'm sure (Chuck) will
                   too. But they have got to understand this game has to change permanently,
                   just not in stages, just not every time pressures applied. We have come to the
                   point now where congress won’t substantial change in an enduring fashion.


Charles Schumer: I would like to - I would like to move to legislation. We find the opportunity
                   before the end of May, yes.


Man:               Okay, thank you.


Scott Paul:        (Doug) I just want to add - add a brief comment Scott Paul here. Historically
                   this is the only way that change happens. President (Regan) did it with a
                   (unintelligible) but he was - his hands was forced by an active congress
                   President (Nixon) did it in 1971 and it produced results. Our trade deficit
                   came down in both instances. So there is a - there is a road map to do this.
                   And we recommend the leadership of senator (Schumer) senator (Graham)
                   and others for moving this forward.


Man:               Thanks.


Moderator:         Our next question comes from (Harvard Snyder) from Washington Post. Your
                   line is open.


(Harvard Snyder): Hi senators, hi (Scott). Two things, first sort of a data questions here, which is
                   that, you know, you - senator (Schumer) and (Graham) mentioned that there
                   was this - this 20% appreciation you want to follow their legislation 2005. I
                   was wondering in doing the study we were able to - to tease out a - a slowing
                   in the job loss as of 2005, when that 20% appreciation took place?
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(Rob Scott):   I - I can respond to this (Scott) if it's all right. This is (Rob Scott) from EPI. I
               did - did the study and we did not observe any slowing in 2006-2007. And the
               - the trade deficit did stop growing somewhat in 2008. But that was largely
               due to the recession not to the appreciation of the currency. We - we had a
               seminar on this last week with (Paul Crewmen) and (Fred Burgs) and they
               pointed out that because China is growing so fast, its productivity is growing
               so fast. The 20% appreciation was just necessary to keep up with very rapid
               productivity -


Man:           Their - their currency is misaligned by as much now as it was then. That’s the
               problem. In another words it would just dropped even. If we might have
               saved some jobs but you can’t really tell, because productivity is going up so
               much. And currency misalignment gets worse.


Man:           Okay. And then for the senators I'm just interested in - in how you sort of
               divine the politics of this moment versus the, you know, the two previous
               reports that the Obama Administration has put out on this issues of why do we
               think (Tim Ginner) or (Larry Summers) were changing their perspective?


Man:           I think we are all set up. I think China has speak on economic recovery there
               was a little more tolerance in the administration not with us. While there was
               a recession and they were worried about loosing jobs and now gaining jobs,
               and they are gaining exports, their economy is growing they are still sticking
               to this policy. So I think that maybe different and frankly, I think our pressure
               is going to make a difference not only to China, but to the administration.


Man:           Do you find the, the recent statements from the business community at all,
               (Myers Gillian) from the chamber for example that they are, you know, they
               are changing their tune a little bit, do you think that might change the
               discussion at all?
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Man:   Well business, you know, business has always been divided on this large
       multinational corporations, don’t have any interest in – in American jobs
       versus oversees jobs or they wouldn’t move from there. But lots of the
       business community is becoming change, but the biggest change I think I have
       noticed and I want to what (Lincy) thinks, is in the academic community, I
       think everybody, you know, when we first did this we were just called
       protectionist even thought we met all of the (tenets) of free trade. And I don’t
       think people calling that anymore most people say GM they even those who
       were sort of skeptical, say I don’t like this solutions but we need some
       solutions and there hasn’t seems to be any other?


Man:   Yeah. I would just add and its hard for an American political leader for this
       and put your head in the sand any longer because China impact on the world
       economy is substantial they are not some all nation that’s manipulates its
       currency and just pay the bills. They are a major economic power and there is
       no rational justification for allowing someone this big who exports this much
       to keep their currency from going where the market would take it. That’s the
       academic side of this argument is gaining strength by the moment, simply
       because to ignore China for currency manipulation is basically to ignore
       economic reality in the ways the economy works and, you know, you
       apologizing for China is where we are at today, there is no rational reasons to
       suggest that what we are doing is not needed there is no good economic
       arguments. I do realized its some good we will go up price here at home. But
       again that price to – that’s if a goods make oh, if its small compared the
       number of hobs loosing.


Man:   Okay. Thank you sir, lets take one more if that s okay man?


Man:   Yeah. We have to vote I think.
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Woman:           Thank you, our next is (Tom Berkeley), from Dow Jones your lines open?


(Tom Berkeley): Yes, thank you gentleman so the questions for (unintelligible) and Graham. I
                 am just wondering given that President Obama has now call for China to
                 move towards the more flexible currency whether you think that’s any
                 indications treasury will finally labeled and manipulating?


Man:             I think treasury service we considering.


Man:             I have been down this road with – republican and democratic administration
                 and this is a thing that everyone campaigns on test about – and when you
                 actually have to pull the trigger no ones pulls the trigger. I am hopeful that we
                 will go ahead and speak truth to power and the obvious answer to the question
                 is China’s currency is misaligned in a dramatic fashion do a manipulation and
                 I think it would be healthy for us to say that. Because you can’t have a real
                 strong relationship with the country, you know, don’t speak truth to each
                 other.


Man:             I mean I just say one other thing and I would have to speak to my cosponsors,
                 speaking for myself even should they labeled China manipulator we are still
                 going to pass our legislation because the phase is just too slow even once the
                 administration does that...


Man:             Right.


Man:             We need to speed it up.


Man:             I agree.
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Man:             (Unintelligible) and Graham, thank you (Robin) I can stay on and claim up we
                 know you have to had to vote.


Man:             Thanks.


Man:             But we appreciate your leadership on this look forward to continuing to work
                 together.


Man:             Thanks everybody, thanks (Lincy).


(Lincy):         Thank you our next questions comes from (Ted Evanoff) Indianapolis Star
                 your lines is open.


(Ted Evanoff):   Thank you gentleman if this legislation is passed, would it bring back jobs or
                 would It, would it bring back the 2.4 million or would it simply – stop the loss
                 of further jobs?


(Scott):         I will answer that first and (Rob) will want to way in because his thought long
                 and hard about this question. There is an enormous body of evidence that this
                 would create jobs and most folks on the economic spectrum even people like
                 (Fred Bust) at the Institute For International Economics and (Paul Truman).
                 But both of them are very – very kind of a cast in the free trade camp. I think
                 that ending currency manipulation would create substantial numbers of US
                 jobs, 100s of thousands or perhaps even a million. And I want to point out
                 one thing (Ted), if Washington is looking for a stimulus this is a stimulus that
                 cost the treasury absolutely no money creates good paying manufacturing jobs
                 and helps to balance our trade account. I cant think of a better solutions for
                 jobs right now. (Rob) may want to way in.
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(Rob):     (Scott) I – I would agree with that and emphasize that these are sustainable
           jobs once we create them and we can continue to these exports, your – you
           can grow them and – and those jobs would still be there and, you know, that’s
           – that’s one of the best things about this. I think actually just to – to update
           the numbers a bit - (Burgs) actually said last week he thoughts that getting the
           currency values correct would actually create the two million jobs and I – I
           think that’s conservatively accurate and – and the reasons is that its not just
           China, China is at the center of a – of a global currency misalignment
           problems its focused primarily in Asia there, there perhaps four or five
           countries in Asia, Taiwan, Singapore and Malaysia, and you know, and China
           perhaps Japan, to some extend that are – still manipulating their currencies
           that first three or perhaps over about under valued by 25 to 30%.


           If they cant revalue until China does, so we need a more of a global currency
           realignment and – and that’s what's going to help to provide some of the
           stimulus that would come out of expanding exports and reducing a straight
           deficit.


(Scott):   If China re-alliance 30 or 40% of these other Asians nations then following in
           China’s paths. Whether or not still remain a – a wage differential that would
           favor Asia compared to US manufactures?


Man:       Certainly what I going to, you know, there is some industries wish we are not
           likely to be able to compete in textiles software for example. If only they
           generates well over trillion dollars with exports today, so the questions I think
           is can we accelerate the rate of growth of exports and cant we damp in this
           flood some sort of imports is coming in from china and some of these other
           countries and I think if we cant achieve that whether with revaluation.
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Man:       (Scott) – would just add that this would help in competition third markets as
           well substantially and the impact would probably be less more labor intensive
           manufacturing and – and but it would have an impact where you would see
           the most would be and capital intensive industries where is US is highly
           efficient, highly productive, and even the – the wage differential is not as big
           of a factor because of productivity and other advantages that we have. But the
           one thing that no manufactures can overcome is – is the currency
           misalignment and – and that’s – that’s the key piece to – to starting to knock
           this down and create some jobs here.


Man:       (Scott), if I might ask how did you differentiate between jobs lost as a result of
           trade and – and jobs lost as a result of other reasons?


(Scott):   I will let (Rob) answer that questions but this – this study is state of the art and
           its looks it trade flows, I think the question on productivity is one that (Rob)
           can easily answer and we brought it, its really canard in this debate. But this
           is looking specifically at trade flow, so I mean there is – there is no we are not
           making any assertion that these are jobs that could have been lost due to
           productivity, (Rob).


(Rob):     Yes, this study essentially estimates the job contend change in the trade flows
           and that’s what we say we had estimates of –jobs displays – using models
           that’s published by the bureau of labor statistics and the commerce
           department. So this is a – these are based on standard economic techniques in
           terms of the productivity questions I think I have addressed that in a blog post
           I have I can – I can make available I think its available on – on our website
           and on – on AEM website as well. So please I did – hoping them – hoping
           them post a couple of weeks ago. And that’s I showed that what's happened is
           that we have had high productivity growth and manufacturing for decades.
           That was true in the 90s, it was true in this decade, what has changed is that in
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                   the past that was matched by a high rates of growth of output of manufacturer
                   goods. Productivity and output growth, both grew about 4% a year in the
                   1990s. In this decade it has only grown 1% or 2% a year while productivity
                   has continued to grow about 4% a year. The reason output has not grown is
                   because of the flood of imports and - and so this does explain a large part of
                   the loss in manufacturing.


Man:               Okay. Thank you.


Operator:          Thank you.       Our next question comes from (Louis Stanley) from
                   Congressional Quarter, your line is open.


(Louis Stanley):   Hi, (Louis). I will just put up a question. I - I am just curious about the past
                   year of Schumer, Graham legislation in the house with the new chairman of
                   the Ways and Means Committee, do you have any read on the extend to what
                   she is interested in following this kind of approach?


Man:               (Scott), I will leave it to you. You there?


(Robert Scott):    Sorry about that. Yeah, acting chairman Levin has had a longstanding interest
                   in our trade relationship with China and as you know he is conducting a
                   hearing tomorrow where (Fred Brookston) and (Clyde Watson) and (Nile
                   Ferguson) and a couple of other folks are testifying on this. And I think the,
                   you know, I suspect that just because of the nature of the bodies, I mean,
                   senator Schumer and senator Graham would have a, you know, an easier time
                   attaching this to a vehicle than in starting the process, than kind of waiting for
                   the house of representatives to work through it's process. So it, yeah, I haven't
                   talked to senator, I mean, excuse me, to chairman Levin particularly about the
                   - the Schumer, Graham approach, but I know that this is an issue that's of
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                 great concern to him.     And he certainly believes that the currency has
                 misaligns and that the United States should respond.


Man:             Thank you.


Operator:        Thank you. Our next question comes from Sari, I am sorry.


Sari Heidenreich: Heidenreich.


Operator:        Sari Heidenreich from Market News International, your line is open.


Sari Heidenreich: Hi, thank you. I have two questions. The first one is, I am just kind of
                 wondering how you guys would respond to the UN trade and development
                 conference that said, I am not "I'm here from an article" that says one private
                 consumption is raising at a break next speed and labor cost are surging,
                 dropping along pack to the dollar I mean accelerated loss of competitiveness
                 with a dangerous consequence to the world. This would be unfair because
                 China has done more than any other emerging country to stimulate domestic
                 demand. I mean, they propose rather than the US taking action and they
                 propose that that kind of be a worldwide regulation of that but they said again
                 they are trying to make China abide by this right now, would be unfair and,
                 you know, cause more harm to the world market.


Man:             I would say they are living in an alternative universe. China's mercantilism
                 and beggar-thy-neighbor economic policies have done more harm to global
                 growth, developing countries, not to mention jobs and factories in United
                 States than any other single practice during this latest global recession. They
                 have solved their own employment problem by exporting their problems to
                 other countries and they should be held to account. There is, you know, India,
                 thanks to China misaligns its currency. Brazil does, the EU does, it's not just
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                  the United States that's making this claim and it's backed up by some of the
                  leading economic minds in the world. If we want to restore balance to global
                  accounts and increase global growth, the best way to do that is to realign the
                  currencies to market rates, I don't think there is any question about that.


(Robert Scott):   Yeah, I would just add that China's dependence on export line of growth has
                  really come at a tremendous expense to it's own people.                There have
                  suppressed wages, they have suppressed the purchasing power of China's
                  consumers, they have also expended enormous amounts of Chinese treasure in
                  suppressing the currency. They purchased over $2.2 trillion worth of foreign
                  exchange just since 2001. That money would have been much better invested
                  in meeting social needs, needs for infrastructure in China than simply bearing
                  it in treasury bills. So if they simply allow their currency to appreciate as
                  market forces would normally indicate, they would be much better off today.
                  China needs to find another way to grow rather than being - continuing to be
                  overly dependent on exports.


Sari Heidenreich: All right. Could you clarify, who was just speaking?


(Robert Scott):   Well I'm sorry, I'm (Robert Scott), I am the - (Robert. E) for the record. I am
                  an economist with the Economic Policy Institute.


Sari Heidenreich: Okay. And then my second question would be, did your study look at all
                  future trends that could, you know, you saw this many job losses in from 2001
                  to 2008, do we have any sort of predictions of what kind of job losses we are
                  going to see if this policy have incurred?


(Robert Scott):   The study is simply, it's purely historical, I have not done any kind of
                  forecasting at all, again this is - this is (Robert Scott), I have not done any
                  forecasting in this study. And it depends entirely on, I think the future course
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                  of currency and other trade policies. The currency misalignment is not the
                  only cause of China's trade surplus, they have also engaged in suppression of
                  wages and they have only subsidize their exports and they restrict import. So
                  there are a number of trade problems we have but currency is certainly near
                  the top, at or near the top of the agenda.


Sari Heidenreich: Thank you.


Operator:         Thank you. Our next question comes from Charles Harris. Your line is open.


Charles Harris:   Hi, thanks all for the call today. I just wanted to ask about the Chinese
                  ministers announcing earlier or suggesting that the March trade that there will
                  be a record trade deficit in March and whether, I guess, AU thought that being
                  - having fall at this issue that that's a very unusual announcement that it comes
                  in response to this whole issue that we are seeing with between the China and
                  the US and then also if there is any evidence that, you know, there might be
                  some manipulation of their numbers?


Man:              (Scott), do you have a point of view on that?


Man:              Yeah, the - I think that there is some acknowledgement that there maybe a
                  decline in China's trade deficit in part because of the linear new year. So it's
                  like the snow effecting the unemployment rate in the Washington DC it's a
                  blip, it's not a trend. So I think it has absolutely no correlation or impact to
                  what we are talking here today. If you look at the percentage increase of
                  China as a share of the overall US trade deficit, every year since 2001 it's
                  headed up and up and up and up and now it's 80% of our trade deficit
                  manufactured goods when you take out oil. And it's, you know, it's four-fifth
                  of our trade. I don't expect there to be a lot of sympathy, but for China's
                  leaders for the policies that they have enacted, it's classic mercantilism, I
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                  mean, they have tried to promote economic stability at everyone else's
                  expense and it's about time someone call them on it and shame on us, we are
                  not doing it sooner.


(Robert Scott):   Yeah, this is (Robert Scott). Again, I would just echo that yeah, you have to
                  look at trade and certainly using at least annual data month-to-month, there is
                  a huge amount of noise in these figures. The other point is that that there are
                  problems with China's estimates based on trade flows. If you look at reported
                  imports that all the countries report from China and for any given period of
                  time they typically had up to substantially more than China's reported exports,
                  is that’s not well known and consistent problem with three statistics and there
                  are reasons for it, we can get into but not on this call. Any other questions?


Operator:         Yeah. Our next question comes from (Corinna Petry) from the American
                  Metal market, your line is open.


(Corinna Petry): Good afternoon gentlemen. I need some basic information and that is the
                  number and the name of the bill being proposed by senator Schumer and
                  Graham please.


Man:              I don’t have that. (Scott), do you have that?


(Robert Scott):   I believe that's on the media announcement, but I don't have it handy at my
                  fingertips, we can certainly get that to you afterwards rather than trying to
                  search for it here on this call.


(Corinna Petry): Thank you.


Operator:         Thank you. Our next question comes from (David Moberg), In These Times.
                  Your line is open. Our next question comes from (Mark Genver).
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(Mark):           (Guenberg). Good try.


Operator:         I am sorry.


(Mark):           That’s okay. I want to get some basic numbers here. If our annual trade
                  deficit with China is approximately $300 billion, can we break down, how
                  much of that is currency, how much of that is Chinese suppression of workers
                  rights, how much of that is other factors?       And the second question for
                  (Robert Scott) is your study goes through 2008, well, we are in 2010, what
                  have you seen for 2009 if anything?


(Robert Scott):   In terms of the first question I have not broken down the job loss between
                  2001 and 2008 into the causes that you mentioned. You know, I would say
                  that probably, you know, the largest single contributor is currency
                  manipulation and I think the other factors that you mentioned are also
                  important. So currency clearly is responsible for at least, you know, well over
                  a million of those jobs that are displaced, I mean, my ballpark estimate. In
                  terms of 2009 and going forward the trade deposit in 2009 trunk sharply
                  because there was a collapse in world trade. If you just look mechanically it's
                  a drop numbers that means these jobs displace numbers would probably go
                  down. I think as I said earlier, I think you need to look over time at what
                  happens. And I think all projections that I have seen suggest that the US trade
                  deposit is going to go - we are going to go up again in 2010, and by 2012 the
                  best work as I have seen suggest this is going to be back in the 5.5% to 6% of
                  GDP range where it was in 2006 and '07.


Man:              As a follow-up to that since the forecasting shows that it is going to go up
                  again or at least I believe it's going to go up again. And if the legislation was
                  to pass and as - as (Scott) was saying or the jobs would be created if the
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                  legislation was passed. Can we - can we do a little forecasting on that end, in
                  other words how many jobs would be created in those years, either of you at
                  over how long.


(Robert Scott):   And again this is - this is (Rob Scott). Typically if currencies depreciate, if
                  the attorneys want and the other currencies we mentioned depreciate and let's
                  say the trade - value of the dollar would fall perhaps from 5% to 10% that’s
                  what's being discussed in amongst economist looking at this issue. Typically
                  that would take two to three years to have its full impact on the domestic
                  economies, we will be looking in 2012. And the study that I rely on from the
                  institute for - Peterson Institute for International Economics --


Man:              Right.


(Robert Scott):   -- suggest that we get the dollar down that much we can reduce the projected
                  trade deficits from about 6% GDP down to about 3% GDP and I would
                  estimate that roughly will create two to three million jobs in the domestic
                  economy both the manufacturing and in the industries that are supported by
                  the exports, net exports of goods and services.


Man:              Two to three main jobs, over how long the period of time?


(Robert Scott):   Over two to three years.


Man:              Okay.


(Robert Scott):   Thank you.


Man:              You are welcome.
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Operator:   Thank you. And we will take our last question from (Arthur Levin) from
            (unintelligible), your line is open. Mr. (Levin).


Man:        Okay. All right. Okay. If there are no more questions I just wanted to thank
            everyone for being on the call and there is a reminder, you can download the
            full report from the website of the economic policy institute at epi.org, you
            can find the interactive map on the website of the Alliance for American
            Manufacturing, which is americanmanufacturing.org and we thank you for
            your time today and appreciate your attention to this issue.


Operator:   That concludes today’s conference. Thank you for your participation. You
            may now disconnect.

								
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