Trade and China

Testimony before the Senate Finance Committee Subcommittee on International Trade, Customs, and Global Competitiveness for a hearing on ‘Market Access Challenges in China’

Testimony • By Thea M. Lee • April 11, 2018

“This litany of unfair trade practices and currency manipulation has had a serious and pervasive negative impact on American jobs and wages. As my colleague, Rob Scott, demonstrated in a 2017 report, Growth in U.S.–China Trade Deficit between 2001 and 2015 Cost 3.4 Million Jobs [ https://www.epi.org/publication/growth-in-u-s-china-trade-deficit-between-2001-and-2015-cost-3-4-million-jobs-heres-how-to-rebalance-trade-and-rebuild-american-manufacturing ], the deficit cost jobs in all 50 states and the District of Columbia. Between 2001 and 2011, the growing trade deficit cost directly impacted workers $37 billion a year, while also putting downward pressure on the wages of all non-college graduates by $180 billion a year.”

Well informed analysis.

Read the testimony.

https://www.epi.org/publication/testimony-before-the-senate-finance-committee-subcommittee-on-international-trade-customs-and-global-competitiveness-for-a-hearing-on-market-access-challenges-in-china/

For an alternate viewpoint read;

http://www.dsausa.org/socialism_and_international_competition_a_response_to_daniel_adkins

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The U.S. Needs Cops on the Trade Beat

The Trump Administration’s abruptly announced tariffs on washing machines and solar cells imported to the United States provoked wailing and the gnashing of teeth worldwide.

The same over-the-top beating of breasts can be expected if the administration penalizes steel and aluminum imported from countries that violate trade regulations.

Every time the United States enforces trade law, the recrimination starts. America, the free traders say, has no right to shield its domestic manufacturing from the onslaught of unfairly traded imports. There should be no cops on the trade beat, free traders say. It should be the Wild West when it comes to international trade, with the last factory standing the winner, no matter how many trade rules it defied to get there.

Playing Fair

American manufacturers – including those that make steel, aluminum, solar panels and washing machines – can compete and win against any challenger in the world when the contest is fair, when all firms that export follow trade rules. But American manufacturers lose when foreign producers export underpriced products after receiving loans that don’t have to be paid back, government-subsidized raw materials and other massive state aid.

American manufacturers shouldn’t be patsies in a rigged game. That’s why they are demanding trade law enforcement. They’re not seeking protectionism, which shields domestic manufacturing from fairly traded imports. Instead, they want prosecution, which is punishing trade violators whose cheating destroys American manufacturing and jobs.

China, probably the most flagrant trade rule violator in the world, was among the first to cry “protectionism” after the Trump administration announced the washing machine and solar panel tariffs on Monday. Chinese president Xi Jinping’s chief economic advisor, Liu He, said at Davos this week that his country stood against protectionism and for globalism.

Sure, China wants globalism after its trade violations have destroyed every other country’s industrial base, leaving the Asian giant standing as the only producer globally.

And it’s close to achieving that in the manufacture of solar cells and panels after more than a decade of trade violations. China issued a renewable energy law in 2005 including measures to promote solar manufacturing. Then in 2010, the China State Council listed renewable energy as one of seven industries eligible for special government incentives and loans.

Before China began giving solar manufacturers special perks in 2005, its share of global production was 7 percent. Now, it makes 60 percent of the world’s solar cells and 71 percent of solar modules.

In 2011 the U.S. Commerce Department determined that China was improperly subsidizing its solar producers and that they were selling panels and cells in the United States for less than fair market value, both of which violate trade rules.

As a result, the United States imposed penalties on the imports. Chinese manufacturers ducked the tariffs by moving production to Taiwan.  When American producers asked the Commerce Department in 2013 to deal with this dodge, Chinese companies moved production again.

The Commerce Department concluded that from 2012 to 2016 imports of Chinese solar cells and panels grew 500 percent and the price declined 60 percent, bankrupting and driving out of business American producers. Between 2012 and 2017 – a period of just five years – 25 American solar manufacturers closed. And now, another has shut down and declared bankruptcy.

Last May, two U.S. solar companies asked the U.S. International Trade Commission (ITC) to investigate. The ITC recommended tariffs even higher than those that the president ultimately imposed this week. They penalties are worldwide this time, preventing Chinese companies from evading them by shifting production again.

This kind of trade law flouting by China is exactly what is ravaging the American aluminum and steel industries.

Twenty years ago, there were 23 aluminum smelters in the U.S. Now there are five.

Similarly, in the steel industry, thousands of good, family-supporting U.S. jobs were lost and mills and parts of mills closed as China ramped up production, flooded the world market and drove down prices. Between 2000 and 2014, Chinese steel production rose 540 percent. U.S. production, a mere fraction of the Asian giant’s, fell 13 percent.

As with solar, China put government money into its aluminum and steel industries, improperly tipping the trade scales in its favor. And as with solar, when U.S. aluminum and steel companies won trade cases, some Chinese producers moved or falsely marked products as made elsewhere to skirt American tariffs. The European Union’s anti-fraud office determined the same thing – that Chinese steel was shipped through Vietnam and given fake certificates of origin to evade EU tariffs.

At just about the same time the solar and washing machine trade cases were filed last year, the Trump administration announced it would investigate whether the damaging effects of unfairly traded steel and aluminum were threatening national security. If so, the administration could impose import quotas and tariffs. Initially, Commerce Secretary Wilbur Ross said these investigations, under Section 232 of the Trade Expansion Act of 1962, would be completed by June 30, 2017.

Integral to every jet, submarine and military weapon, steel and aluminum are vital for defense. Infrastructure is part of national defense as well, from interstate highways to pipelines. The inability to produce these metals in sufficient quantities and qualities domestically jeopardizes national security.

The Commerce Department report was delayed for months, during which time foreign producers flooded as much steel and aluminum as they could into the United States before the anticipated tariffs. Steel imports rose almost 20 percent. Aluminum and bauxite imports rose nearly 32 percent.

The Commerce Department finally delivered the steel report on Jan. 11 and the aluminum report on Jan. 19. Neither was made public, and the administration can, under the terms of the law, wait another 90 days to act. White House Deputy Press Secretary Lindsay Waters said the administration would announce its decision at an appropriate time.

That time is now. It is great that the administration punished the trade-violating exporters of solar products and washing machines. The American steel and aluminum industries and workers want that same enforcement immediately from the nation’s top trade cop.

Leo Gerard is President of the United Steelworkers

 

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Replace NAFTA- Call In Day

Replace NAFTA Call-in Day

Tomorrow, Weds. December 13th!

Brothers & Sisters,

NAFTA helped corporations outsource one million middle-class American jobs, with more and more jobs lost every week..

The terms of this massive corporate power grab are now being renegotiated, with talks happening right now in Washington, D.C.

This could finally be our chance to replace NAFTA and end its damage — but the negotiations are happening behind closed doors with hundreds of corporate advisors granted special access and the public locked out.

Call your member of Congress now to demand a NAFTA replacement that puts people and the planet before corporations. (Toll-free numbers and sample script below, or click to call here.)

The corporations are fighting to preserve the special powers in NAFTA that make it easier for CEOs and companies to outsource jobs to Mexico and to attack our laws before panels of corporate lawyers who can order unlimited payments of our tax dollars to foreign corporations.

NAFTA also lacks enforceable labor and environmental standards so companies can move U.S. jobs to Mexico to pay workers poverty wages, dump toxins and then import those products back to the U.S. for sale. Workers in Mexico and the U.S. lose while corporate profits soar.

Since NAFTA, Mexico’s already low wages are down 9 percent and U.S. wages are flat, while the price of everything has risen. Unless we rewrite NAFTA, NAFTA will keep giving the green light to corporations to outsource American jobs, pushing down wages.

That’s why TODAY, a nationwide coalition of labor, environmental, consumer, faith and farm groups are holding a #ReplaceNAFTA Call-in Day urging Congress to demand that NAFTA renegotiations put people ahead of corporations.

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Renegotiating NAFTA Would Be a Lot Easier, If We Knew What We Wanted

Stan Sorcher, Labor Rep. SPEEA/IFPTE

Updated Sep 06, 2017

  • The Trump administration just started the process of renegotiating NAFTA, the trade deal between the US, Canada, and Mexico that became the template for globalization in the 21st Century.
  • This would make more sense if we knew what we want to renegotiate.
  • In 2016, voters answered two simple questions,
  • “Who gets the gains from trade?” Not us.
  • “Who do you trust?” Not any politician who told us what a great idea NAFTA would be.

In the period following World War II, gains from productivity were shared broadly and our communities prospered. Not anymore. Since the mid-70’s gains from productivity and trade have gone almost entirely to the top 1%, while many communities declined dramatically.

NAFTA went into effect in 1994. It embodies our failed neoliberal approach to globalization. [“Neo” means new. In the language of economics, “liberal” means free-market.]

In the neoliberal vision, our economy is merged or integrated into the global economy. National identities are blurred, shareholder interests have top priority, legitimate public interests are devalued, and gains go almost entirely to investors. Boon will trickle down, as markets solve all our problems. Government is bad. Power and influence favor those who already have plenty of both. Continue reading

NAFTA Trade Talks Begin

tpp
In the midst of the President’s reprehensible response to the racism, anti-Semitism and violence in Charlottesville, the business of his administration continues — with the potential for decades-long consequences to the economy, the environment and public health.

At this very moment, the public is being shut out of the North American Free Trade Agreement (NAFTA) negotiations that formally began today. Meanwhile, hundreds of corporate lobbyists have been given special “cleared advisor” status that gives them privileged access to proposed texts and to the negotiators themselves.

TAKE ACTION: Tell the U.S. Trade Representative and Congress to end the rigged trade negotiating process that puts corporations over working families and the planet.

President Trump got into office in large part on his promise to make NAFTA better for working people, but his administration’s written renegotiation plan fails to take the bold steps needed to accomplish that goal. Instead, it relies heavily on language from the failed Trans-Pacific Partnership (TPP) corporate power grab. If corporations are allowed to dictate the terms of NAFTA’s renegotiation, the pact could become even worse for working people throughout the United States, Mexico and Canada.
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Workers Need Better Trade Deals, Not More Talk

Leo Gerard, AUGUST 4, 2017

President Donald Trump, author of “The Art of the Deal,” said this week that China is giving American workers and companies a crummy one. He promised to do something about it.

This occurred within days of his Commerce Secretary, Wilbur Ross, demanding “fair, free and reciprocal” trade in an op-ed in the Wall Street Journal.

At the same time, Congressional Democrats offered a seven-point plan to give workers what they called “A Better Deal on Trade and Jobs.”

American workers want all of these proposals achieved. They’ve heard this stuff before and supported it then. That includes ending tax breaks for corporations that offshore jobs – something that never happened. It includes the promise to confront China over its steel and aluminum overcapacity – a pledge followed by delay.

Talk is cheap. Jobs are not. The factory anchoring a community’s tax base is not. America’s industrial strength in times of uncertainty is not. All the talk is useless unless workers get some action.
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Trump, Right-Wing Populism, And the Future of Labor

Bill Fletcher jr.