Who will Stand up for Ohio by Standing up to China?

I've finished watching the twentieth, and possibly final, Democratic candidate debate. For someone like me who follows economic and jobs issues closely, the debate was both fascinating and frustrating.

First, the fascinating. Both Senator Obama and Senator Clinton said they would renegotiate the job-killing North American Free Trade Agreement (NAFTA) or exit it if our trading partners did not accept changes. That's a big development, and a welcome one, for Ohio's workers.

But one important economic issue was overlooked by the moderators and candidates alike: China. The word "China" wasn't even mentioned until three minutes before the end of the debate. No issue will have a greater impact on the future prospects of America's workers over the next couple of decades. Our grossly imbalanced trade relationship with China has cost America more than 1.8 million jobs from 2001-2006; 66,000 in Ohio alone.

Worse yet, these job losses are aided by Washington's complicity. Congress and the administration have the power to stop China's cheating and unfair trade practices, but so far, they have sat on their hands. What would a President Obama or a President Clinton do to ensure that American workers and businesses have the same opportunity to compete? Sadly, we still don't know.

No issue matters more to Ohio's economic future. China subsidizes its industries at the expense of our businesses. This is illegal under our trade laws, but no one in Washington has acted to stop it. China dumps its products into our market at below-market prices to undercut our producers. Again, it's an illegal practice, but this administration hasn't done enough to stop it. China manipulates its currency to gain a trade advantage, making its products roughly forty percent cheaper to buy in the U.S., and American products about forty percent more expensive to sell in China. This is a violation of China's trade commitments, but other than endless dialogue with China, this administration has refused to hold China accountable.

Sure, some American consumers enjoy cheap goods from China, but they come with a higher price that is not reflected on the price tag. Millions of lost jobs, dozens of recalls of unsafe and toxic consumer products and toys, a massive U.S. debt that is held by China, and diminished opportunities for good-paying jobs for our next generation.

Ohio voters deserve an answer. Which candidate will hold China accountable for its unfair trade practices and give American workers an opportunity to compete? A week before the primary, we cannot yet say.

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Comments

[Independent voter]

The clintons took illegal donations from the Communist Chinese Military in exchange for granting China Most Favored Nation status. So I don't see hillary, the NAFTA queen, as the person to stand up to China.

[Serfie]

Not only China.

But most major trading partners in the US.

I lived abroad for a long time.

The US has one of the most open markets in the world.

The rest of the world closes itself off the US goods and services through tariff and non-tariff barriers.

The US has an anti-corruption law, where US companies can't bribe foreign officials.

Guess what? Most foreign 1st world countries bribe officials in places like China, Thailand, and other 3rd world countries in order to do business. American companies can't even sell abroad unless they have a "foreign partner." Foreign partner means bribing somebody to allow access to the market.

The Chinese have access to Africa and Latin American markets because they bribe. And they are bribing with US dolllars. You know, those dollars that we pay them to buy their cheap crap.

Further, Japan, China, Russia and India basically steal US goods through reverse engineering, repackaging, and remarketing.

Do you know our embassy officials do? Nothing. They are too busy attending cocktail parties and acting like big shots.

I know. I have been to many US chamber of commerce meetings abroad.

The US government does nothing to protect US interests while going out of its way to make sure foreign companies in the US get national treatment.

The Democratic candidates are idiots who have no clue. All this talk about labor and environmental standards is rubbish. Most factories I have seen are not sweat shops. They are more modern and advanced than many of our factories.

If the US wants to make an impact on unequal treatment, it needs to withdraw from free trade agreements and the WTO and start massively raising tariffs.

[mmckinl]

Exactly , I couldn't have put it better.

We need tariffs and we need them now. The choice is very simple, pay more for American products now and retain our jobs or export our jobs and our dollars and pay even more for products later with no American jobs, a broken economy and a worthless dollar.

[Liberal2]

Indeed, CNN reports an Air Force 40 billion dollar contract to Grumman/EADS, EADS is a Airbus division, This contract is expected to climb over time to 100 billion.Wanna bet this is a Bush-to-Europe bribe for support in Iraq, Afghanistan, and Iran?

[Merlin7]

This sounds suspiciously like the Lou Dobbs Approach to Politics: Just Blame the Foreign Country of Your Choice. China subsidizes some of its industries? Well, who do you think subsidizes Boeing, Lockheed Martin and dozens of others? The U.S. taxpayers, that's who. And when it comes to currency manipulation, no one can hold a candle to Uncle Sam, who rules the planet by fiat through the International Monetary Fund and other global agencies.
I'm not a big fan of China, but this Beijing-bashing is getting ridiculous. Take Darfur (please). If China didn't buy that oil, other countries would step forward to snap it up. And yet we expect China to wave its magic chopsticks and suddenly halt the centuries-old genocide that goes on in Darfur. Give me a break. We buy most of Venezuela's oil; are we to blame for political and racial strife within that country?
If we don't want to do business with China, all we have to do is order our industries to pull out of there -- and pay the resulting higher prices for products in our stores. Who's willing to put their money where their mouth is? . . . That's what I thought.

[maddogbitesback]

Why was China allowed to take jobs from Americans? It is simple. Americans have endorsed the use of slave labor and no environmental controls so long as they can have a whole lot of cheap shirts. If Americans would live with less and defend the globe from their own greed then American jobs would be in America where the standards for environmental protection and minimum protection of workers is the law. WalMart sells goods from China and then has more people who need to shop at WalMart. It is the same thing with taxes. It is unChristian to have almost fifty million people without health insurance but it seems that the wealthiest country in the world finds that ok. Ditto good schools.

[OhioPoBoy]

In spite of all the obfuscation, Senator Clinton was touting NAFTA while her husband was kowtowing to Globalism. Senator Obama was actively trying to rebuild communities devastated by job loss caused by this ill-advised destruction of the dollar. We played right into their hands and GWB only made it worse. I would hope that everyone has become more aware of how America is mortgaging her long term future for short-term profits. Without a middle class we can rapidly become a more feudal and more futile way of life.

[NABNYC]

Everytime anyone says they will "solve" the trade problems by demanding labor and environment standards, I just choke. This isn't the real concern, so why pretend it is? An unemployed American isn't going to be okay about the fact that their job is being done in Thailand just because the workers in Thailand are treated well, and the business doesn't dump poison into the ground. It's fairly irrelevant.

The fact is that some groups, including unions, decided they couldn't attack the jobs leaving solely based on protectionist grounds, so they came up with these other bizarre objections based on environment and labor standards.

I think the correct way to approach the problem is the direct way. We object to jobs leaving the U.S. Any business that takes jobs to another country should have its corporate charter yanked, and the ability to import and sell eliminated. Or, of course, tax all such businesses based on the assumed difference in pay between what they would have paid if they left the job here compared to what they're paying in China. Use that money to build new businesses and employ Americans.

If we really want to get tough, why not say that homeland security depends at least in part on Americans having jobs. Why not declare all trade secrets and patents to be national property, and make it illegal for anyone to take those out of the country. No, the giant drug companies do not need to take their patents to India and use slave labor to manufacture drugs. They can manufacture them right here in the U.S. After all, American consumers pay more and probably use more of the drugs, so keep the jobs here.

We need a direct approach to this problem. Our government and both parties favor allowing corporations to use slave labor and maximum the profits to the CEOs. The CEOs pay enormous bribes to the politicians. We need to punish the businesses that take jobs out of the U.S., and get rid of the politicians that support them.

That includes agricultural and food stuff. It is so bizarre that we import more and more of our produce from Mexico, a third world country which lacks clean water, and pours poison all over produce then ships it up here and sells it to Americans. And now we're importing poisoned food from China. We need to limit any food imports and bring food production back into this country. To protect our health, if for no other reason. When Mexico gets basic sanitation standards, decent living and healthcare in place for their people, and cleans up their water and sewage, then we should consider importing produce, but not until then.

[SlithyTove]

You argue your position passionately. You're on to something there, but perhaps there are simpler ways of achieving the goal of fairness in trade and loss of jobs without regulatory measures that are overly complicated to establish criteria for, or heavy handed in their application.

Our premise is that competition among corporations is always good and must be encouraged, but gaining competitive advantage through unfair means is not. Why not consider measures like taxing all corporations at a fairly low base rate (say 25% for the sake of argument), and then compound that tax rate when a company's market share crosses a certain threshold (say 33%, on the premise that you need 3 or more players to discourage oligopoly)? I can see this being particularly effective in erasing media consolidation -- don't let the door hit you on the way out, Murdoch!

These are just off-the-cuff thoughts, not seriously researched proposals...however, I am certain we can achieve enormous effect on rogue behavior through little tweaks that actually simplify rather than complicate the tax code, reward the creation of good American jobs and punish cynical wage arbitration and tax-shelter maneuvers. Case in point -- Halliburton moving its headquarters from Houston to Dubai to pay less taxes and dodge American laws and regulatory oversight while continuing to receive massive no-bid contracts from friends in the White House.

I'd like to follow up your argument on the folly of importing food and agricultural products willy nilly from any cesspool of a producing nation: contrast that blase unconcern (in the name of free trade) to the dangers of what we and our children put into our bodies in great quantities every day with the ENORMOUS solicitude for our well-being the FDA develops over the near-zero risks of importing drugs from Canada (when free trade suddenly goes clean out the window).

[PinkoAttic]

I really appreciated your post, even if I disagree somewhat. While it may be true that labor and environmental objections were a red herring, they now form the only unobjectionable (read unblatantly protectionist) means of attacking the problem. It's too late to turn the clock back on free trade. As a Canadian, I was fervently against it in the early 90's and still don't think that Canada took the right route. We lost a ton of manufacturing jobs to be replaced with the $10 an hour " service industry " substitutes and I know the same happened to our friends south of the border. The three economies are now so intrinsically intertwined that it would do more harm than good to unravel them. That being said, there is something we can collectively do about China and other developing economies. We need to demand that they stop fiddling with their currency; to demand that they enforce strict labour standards; and we need to give up the pretence of policies such as Kyoto, (the U.S, excepted since you never signed on to it) in favour of a system where all countries have to abide by similarly strict emission controls. To argue that it is unfair for the Chinese et al. to have to play by the same environmental standards as us given that the western world has already experienced its economic development does not fly. Nobody knew what the environmental results of our development would be until the late 50's, so we cannot be blamed for having done nothing about it earlier.

In short, Fair Trade is the modern answer. If the Chinese are made to experience the same costs of production that we do in North America, then the jobs will start flowing back to the U.S. midwest and central Canada since our workforce will once again become comparatively competitive. The fact that no politician on either side of the Canada/US border (with the exception of Canada's socialist NDP) will even entertain putting these issues to the Chinese tells you a lot about how much power and influence conglomerates like Wal Mart actually wield.

[PinkoAttic]

Good article.

But what do you expect when one of the candidates worked on the board of Wal Mart who are among the real beneficiaries of China's boom ?

Attacking NAFTA rather than China is like bailing a leaky boat with a thimble. The sad truth is that the U.S. is in debt so deep to the Chinese that no one wants to rock the boat, and no candidate has the intestinal fortitude to challenge that status quo (it's a change you shouldn't believe in !).