Is it Possible to Have an Honest Trade Debate?Saturday, April 28, 2012 23:34
If there is one thing that has provided me with a consistent irritant, it is the way in which the US-China trade issues can be politicized on the US side, and in a way that offers absolutely no benefit to the US manufacturing sector (or those who have lost their jobs to offshoring). It is in many ways what I feel is wrong with the US right now, as there is a complete failure to actually take the time to understand the core issues behind byproducts (in this case – lost jobs), and the constant reliance on something so intangible that all that can be done is to fund more research.
China steals jobs through currency manipulation.
China has erected trade barriers to keep US products out.
China unfairly subsidizes Chinese exports.
I am not saying that any of the above are false per se, or that data does not exist to support the assertion that over the last 15 years of China’s development they employed the highest power economic vacuums possible to suck up global investments (for its sole benefit), but these reports never provide that context.
It just about manipulation and retaliation
The recent Economic Policy Institute report Jobs In The U.S. Auto-Parts Industry Are at Risk Due to Subsidized and Unfairly traded Chinese Auto Parts (download PDF here) is just another one of those reports on the pile. It is a report that I would say has a real point to make, that trade has exacerbated (perhaps catalyzed) job loss, but losses the plot when it just blames “China”.
How effective is this in the end?
That’s debatable to me, particularly as the US constantly backs down at the very end, and while there is more than enough rhetoric “proving” China manipulates the field, Treasure never would pull the trigger and call China a currency manipulator, congress would always pass up the opportunity to pass anything punitive, and when action was taken (as in the case of the recent solar subsidies) it was weak at best.
Which is where I come back to the initial question. Can an honest trade debate take place? To me, the ultimate question is not whether or not China is fudging the system, but when the process of “dealing” with China always involved a dishonest debate. There are certainly more than a few areas where the US (and other nations) could engage and take actions that would “level the playing field”, or at the least be honest about why their countries are behind (so as to catalyze a market response), but perhaps that wouldn’t garner the attention.
I’m not sure.
But one thing I am sure about is that the disingenuous debates that are ongoing are not helping either.