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Post by blueneck on Mar 31, 2007 7:49:50 GMT -6
Another great move spearheaded by Dorgan with bi-partisan support to force chine to float their currency, and an annual review of China's trade practices subject to approval (note the pro global business bias Forbes tries to put on it) www.forbes.com/businessinthebeltway/2007/03/27/china-trade-senate-biz-wash-cx_bw_0328chinatrade.htmlHere is pro fair trader Tonelson's response to the article Alan Tonelson, a research fellow at the U.S. Business and Industry Council, an advocate for domestic manufacturing interests, says Dorgan's proposal is "an absolutely excellent idea and quite a bit overdue given China's determination to violate trade norms."
Moreover, he says the view of the WTO expressed by Bhagwati is "profoundly naïve" because the international organization is not an impartial arbiter of trade disputes.
"It's essentially political," he says. "It's comprised of 150 countries more interested in keeping America's market open to their products than keeping their markets open to our products. We're the engine of growth for everybody else and they want to keep it that way."
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Post by unlawflcombatnt on Mar 31, 2007 14:42:11 GMT -6
This is an excellent, and very encouraging article. Senator Byron Dorgan has again demonstrated why he's my favorite Senator.
As usual, the greedy Right-Wing Corporatists responded with their usual deceptions and outright lies.
Leading the pack of spin doctors were Daniel Griswold of the Cato Institute and Jagdish Bhagwati of Columbia University. The biggest lie that came out the article was "Most goods brought into the U.S. from China are low-end consumer goods, such as textile products...."
Are they serious?! Almost all computers and computer-related equipment are made in China, as are almost all TVs, cameras, VCRs, DVD players, etc. Most people wouldn't consider a $900 computer a "low-end consumer good." (I guess if you're an over-paid, but under-worked propagandist like Bhagwati or Griswold, a $900 computer is considered a "low-end consumer good.")
The next piece of propaganda: "Raising tariffs on these goods could harm millions of middle- and lower-class consumers." Raising tariffs would reduce the profitability of American Corporations who have moved their production facilities to China, and make it more profitable to keep those production facilities in the United States.
Regarding prices, retailers charge as much as the market dictates for consumer goods. Reducing production costs does not automatically reduce prices. It simply makes it possible to reduce them and still remain profitable. By the same token, increasing labor costs does not necessarily raise prices. Prices are determined by what consumers are willing to pay for goods. Producers and retailers don't lower prices simply because their labor costs are lower. They lower (or raise) the price to the level that creates the most sales profit. They won't "pass on" their cost increases to consumers, unless it increases total sales profits. If passing on a cost increase (through a price increase) reduces sales profit, they will not maintain higher prices. They'd be reducing their overall profits and returns.
Tonelson's comments are right on target. "Alan Tonelson, a research fellow at the U.S. Business and Industry Council, an advocate for domestic manufacturing interests, says Dorgan's proposal is "an absolutely excellent idea and quite a bit overdue given China's determination to violate trade norms."
Moreover, he says the view of the WTO expressed by Bhagwati is "profoundly naïve" because the international organization is not an impartial arbiter of trade disputes.
"It's essentially political," he says. "It's comprised of 150 countries more interested in keeping America's market open to their products than keeping their markets open to our products. We're the engine of growth for everybody else and they want to keep it that way.""
I'd like to restate that. The WTO's main concern is keeping America's markets open to foreign goods, not keeping foreign markets open to American goods. Again, we need to get out of the WTO as soon as possible. It's simply serving as a vehicle to prevent the U.S. from putting tariffs on imports produced by American-owned companies in foreign countries using cheap foreign labor.
Senator Dorgan also commented on the Smoot-Hawley Tariff of the 1930's, another of many Corporatist straw-man arguments, though he didn't elaborate.
So I'll sum up the Smoot-Hawley issue. At the time of the Smoot-Hawley Tariff, the United States had a huge trade surplus, and this trade surplus added significantly to demand for U.S. production, and demand for U.S. labor to provide that production. Reducing trade under those circumstances reduced production demand and GDP.
The exact opposite is the case now. Roughly $800 billion per year of American consumer production demand is filled by foreign imports. And that's $800 billion less production demand that is filled by American companies and American workers.
Comparing the current tariff proposal with Smoot-Hawley is dishonest, deceptive propanda. Tariffs at the time of Smoot-Hawley were harmful, because we had a huge trade surplus, which was reduced by tariffs. Today we have huge trade deficit, which would also be reduced by tariffs.
Another huge difference between the 1930's and 2007 is the mobility of capital. During the 1930's, there was almost no chance that American capital would flow out of the U.S., into a foreign production facility, and cause the replacement of American workers with low-wage foreign labor. Today this is a huge problem, and the end effect of tariffs would be to reduce the flow of American capital into foreign labor markets, and increase the flow into American labor markets. Putting tariffs on American-owned, foreign-located production facilities reduces the profitability of those facilities, making American facilities relatively more profitable.
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Post by unlawflcombatnt on Mar 31, 2007 15:08:50 GMT -6
A related article by the author of the "Back to the Future With China" article, titled China Trade Sanctions, also discussed the ongoing attempts to establish a free-trade agreement between the United States and South Korea. Of particular interest was the part saying that March 31st is the deadline for establishment of this pact before Bush's fast-track authority expires. According to the article, if this deal was not completed by Saturday (March 31, 2007), it would not be eligible for consideration under fast-track authority. Which means it would be subject to discussion, debate, and amendment by Congress.
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Post by blueneck on Mar 31, 2007 17:13:45 GMT -6
Which would be consistent with Congresses constitutional authority and responsibility
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Post by blueneck on Mar 31, 2007 17:22:30 GMT -6
I really struggle with this canard too. So they may have to spend a couple more bucks at the store, but that would be more than offset by more job security and better wages for working and middle class folks who will have the better paying jobs that don't get shipped offshore.
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