There's a lot we can do to help U.S. manufacturers compete with China.
In a China Real Time Report op-ed, Mike Dunne says that President Obama is right to take action on China's imposition of duties on U.S. car exports:
President Obama is right to blast China for unfair trade practices in the world’s largest auto market. But he’s aiming far too low.
While visiting a Jeep plant in Toledo on Thursday, Obama challenged China’s decision to impose special tariffs of as much as 34% on SUV imports from the U.S., valued at $3.3 billion.
However, Dunne says there's a lot more that the President can do if he wants to get tough on China's continuing violations of world trade law:
But Chinese penalties on SUV imports amount to a tiny sideshow compared to other ways that China tilts this lucrative, $300 billion playing field in its own favor.
Most significant of these: China’s mandatory joint venture rule that has been stubbornly in place since 1985. Chinese law says that global companies from Toyota to GM to Volkswagen can build and sell cars in China only after forming a joint venture with a Chinese firm — usually a state enterprise. Moreover, foreign partners are forbidden from owning more than 50 percent of the joint venture.
Dunne's point is well taken. Government data shows that the U.S. trade deficit with China climbed in both March and April, and Beijing is trying to ramp up its economy at the expense of America's manufacturers.
Here's where Washington needs to enter the picture. Whether it's because of China's undervalued currency, massive subsidies, or market barriers, Congress and the Administration need to fight for a level playing field for America's manufacturers and their workers.
Yes, congratulations should go to President Obama for filing a trade case yesterday with the World Trade Organization (WTO) against China's unfair imposition of duties on imports of U.S. autos.
But that trade case is only one step. Much remains to be done, particularly on China's egregious currency manipulation. The president also needs to initiate an investigation of China's massive subsidization of its auto parts sector.
Much to do, much to do.
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Free trade is not trade
Before we talk about competing with China and others in the global economic arena, we should state openly and directly that free trade is not trade. The U.S. sponsored the moving of factories outside of the U.S. starting in 1956 related to a global money crisis which was exposed by the Suez crisis that same year. It was supposed to be a temporary program to test out new economics models but it never ended. It evolved into the Maquiladora factory program in Mexico and Central America where corporations could take advantage of less than a dollar an hour workers. It had nothing to do with real competition. It really was all about using human beings as a commodity to be traded on global basis with the lowest common denominator being wage slave and even child labor. Let us call it what it is. With more than a billion people in the world willing to work for practically nothing, it is indeed a race to the bottom. The globalist free traders thought they could create a new economic model by making money on money a product to fill the void caused by the lost of good paying jobs. It did not work.
The past three presidents have bailed out the process and put the same people back in charge of the process. Free trade has failed us. We must say it. We must mention the terms NAFTA, GATT, WTO, CAFTA or whatever over and over again as the reason for our economic crisis. It was never about competition. It was about the betrayal of workers everywhere.
The U.S moved more than 4,000 factories to Mexico alone. It did not stop the tide of Mexican workers coming to America seeking economic survival. At the same time it did not work in Mexico or Central America with 12 Mexican Bishops and a leading Archbishop from Central America calling cultural death.
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It comes down to this. If free trade had to be ratified by a popular vote, it would have never passed. This says workers have no voice in the process of globalization and free trade and international entities like the WTO were put in control without the consent of the people. See the latent response of philosophy and religion to the global economic arena at http://therationale.com/
Before we talk about re shoring we need to consider all of this.