House approves bills to boost manufacturing

WASHINGTON (Reuters) - Lawmakers moved closer on Wednesday to creating a commission to find ways to cut the huge trade deficit with China and other countries, while also pushing a strategy to promote U.S. manufacturing.

The House of Representatives passed the bill on the commission as part of a “Make it in America” agenda promoted by Democrats before November’s congressional elections to address voters’ concerns about persistently high U.S. unemployment.

“Make it in America is not just a slogan. It is an objective to make that a reality,” House Majority Leader Steny Hoyer told reporters after the vote.

The House also passed a bill to boost U.S. clean energy technology exports and voted 379-38 for a bill requiring President Barack Obama to develop a national strategy to promote U.S. manufacturing.

“We must take action to support domestic manufacturing and end the outsourcing of American jobs,” said that bill’s chief sponsor, Representative Dan Lipinski. “A strong manufacturing sector is critical to leading America out of recession.”

The Senate must approve all three measures and then the president must sign them into law.

The Senate passed a bill on Tuesday to help manufacturers by temporarily suspending import duties on a long list of raw materials used to make finished goods, as well as some foreign products made with U.S. inputs.

That legislation now goes to Obama, who is expected to sign it. The National Association of Manufacturers estimates the bill would raise U.S. manufacturing output by $4.6 billion and support almost 90,000 jobs.

Hoyer said the House would vote this week on legislation to fund Build America Bonds by closing a tax “loophole” that encourages companies to move jobs overseas. The taxable bonds would be used to finance infrastructure projects through 2012.


The U.S. trade deficit was $375 billion in 2009, down sharply from $699 billion in 2008 as result of the global financial crisis that badly damaged world trade.

But with U.S. economic growth on the rebound, the trade gap has started widening again and already reached nearly $200 billion in the first five months of this year.

A big portion of the trade deficit is with China, which many lawmakers blame for heavy losses in U.S. manufacturing jobs over the past decade.

The bill by Democratic Representative Peter DeFazio would set up a bipartisan commission to study the causes of the trade gap, with a particular focus on foreign currency and trade practices.

It would require the panel, within 16 months of enactment, to recommend to the White House and Congress specific strategies for reducing the gap with China and other countries such as Japan, Mexico and members of the 27-nation European Union that run significant surpluses with the United States.

An earlier version would have barred the White House from submitting new trade deals to Congress until the panel completed its work but that provision was dropped.

Third Way, a moderate Washington think-tank, put out a report on Wednesday saying widespread trade barriers and anti-competitive practices by trade partners “present a major and evolving threat to U.S. exports.”

The solution was not to engage in matching protectionism but to recognize that trade deals boost exports and jobs, to “pursue new trade agreements with urgency” and to beef up enforcement of existing trade pacts, the report said.

Additional reporting by Susan Cornwell and Paul Eckert; Editing by Xavier Briand and John O’Callaghan