3rd world countries don't necessarily produce goods cheaply because of labor exploitation.
Their production advantage comes from having such low costs of living that a fair and non-exploitative wage for unskilled labor can still exist well below the subsistence wages of more developed nations.
Yeah, that's something a lot of people really don't understand. They hear "ZOMG These people are forced to live on $0.50 per day!" when in actuality, that's usually a living wage where they are located.
Not saying that these people are living comfortably, but it's not necessarily "evil" to pay them these low wages. Boycotting products made in these situations just screws the workers there.
I'm also not claiming the Chinese tire labor force is paid a just wage (whatever that means), because I don't know specifically. All I'm saying is research what you're boycotting before your self-righteous crusade is actually taking food out of the mouths of people you think you're helping.
("You" not directed at anyone in particular, here)
I think the problem a lot of people on both sides of the issue have is exploitation and low wages relative to the US are not the same thing or even necessarily related.
Cheap third world production is, fairly legitimately, the greatest force for good we can reasonably bring to bear in those countries. It's a relatively virtuous cycle, where production comes into a completely economically decimated area at wages that are a rounding error anywhere else, build up the economy, infrastructure, and skill set of the population which leads to more businesses coming in and secondary businesses serving the people who are working these new jobs etc etc.
Unfortunately they aren't going to have many (any) benefits or labor laws when the number of paying jobs is several orders of magnitude less than the population, which leads to conditions we would find intolerable anywhere in the first world even before you get into businesses that abuse the already overwhelmingly lax worker protections in what anyone would call exploitation. The best way to combat that isn't some sort of from above moral scheme (as immensely satisfying and as deserved as that may be). It's a combination of social pressure (the whole clothing/sweatshop movement is the model here) and continued economic investment. Don't try and stop the company from working there, because you're just hurting the population and delaying the time when the workers will be economically strong enough to demand concessions, but shame the companies into improving conditions while staying where they are.
There are very few areas where I think the left has significant groups that are simply dogmatically wrong, but globalization is the biggie (the other one being nuclear power).
Betting this will end up with trade sanctions against the US in the end as the WTO rules against us once again due to our protectionist bent. I'm pretty disappointed in Obama, since he hired some of the most brilliant minds in economics to help him...and then ignored their advice in favor of trying to curry favor with unions again. Policies like this have helped make union a dirty word in the US, so I have a hard time feeling sorry for their decline.
I'm just wondering what the Chinese tariff response will be.
I mean, I don't disagree with the decision to implement the tariff, but we do ship stuff to China besides boatloads of cash, and naturally, they're well within their rights (both legally and practically) to respond.
I'm just wondering what the Chinese tariff response will be.
I mean, I don't disagree with the decision to implement the tariff, but we do ship stuff to China besides boatloads of cash, and naturally, they're well within their rights (both legally and practically) to respond.
By Geoff Dyer in Beijing and Tom Braithwaite in Washington
Published: September 13 2009 06:53 | Last updated: September 14 2009 11:57
A full-blown trade row erupted between the US and China after Beijing accused Washington of “rampant protectionism” for imposing heavy duties on imported Chinese tyres and threatened action against imports of US poultry and vehicles.
Trade relations between two of the world’s biggest economies deteriorated after Barack Obama, US president, signed an order late on Friday to impose a new duty of 35 per cent on Chinese tyre imports on top of an existing 4 per cent tariff.
In his first big test on world trade since taking office in January, Mr Obama sided with America’s trade unions, which have complained that a “surge” in imports of Chinese-made tyres had caused 7,000 job losses among US factory workers.
Chen Deming, China’s minister of commerce, condemned the decision, saying that it “sends the wrong signal to the world” at a time when Washington and Beijing should be co-operating to deal with the worst economic and financial crisis in decades.
“This is a grave act of trade protectionism,” Mr Chen said in a statement. “Not only does it violate WTO rules, it contravenes commitments the US government made at the [April] G20 financial summit.”
Beijing said it had requested WTO-sanctioned consultations with the US over Washington’s new duties on tyres. Yao Jian, a commerce ministry spokesman, said the duties were in ”violation of WTO rules”.
China said it would now investigate imports of US poultry and vehicles, responding to complaints from domestic companies.
The US earlier warned Beijing against taking retaliatory action. “Retaliation would be inappropriate, as the United States acted entirely within the bounds of trade laws and within the safeguard provision that China itself agreed to upon accession to the World Trade Organisation,” said an official from the Office of the United States Trade Representative.
US officials said they were scrutinising the export of poultry and vehicles, but said any action in retaliation by China could result in a complaint by the US to the WTO.
Key Tokyo rubber futures tumbled more than 9 per cent to a three-week low on Monday, according to Reuters. News of the additional duties on US tyre imports from China combined with sharply lower oil prices and a stronger yen to push Tokyo rubber futures prices below Y200 a kilogramme.
The dispute comes less than a fortnight before Mr Obama is due to host world leaders at a summit of G20 nations in Pittsburgh and ahead of his planned visit to China in November.
The decision to impose extra tyre tariffs followed a petition by the United Steelworkers union, which represents workers at many US tyre factories. Official US figures show an increase in imports by volume from 14.6m tyres in 2004 to 46m in 2008. The US data shows that the value of tyre imports from China increased from $453.3m in 2004 to $1.8bn in 2008. Four US plants closed in 2006 and 2007 and three more are likely to be closed this year. US production capacity has fallen by 17.8 per cent in the past four years, according to the official data.
Eswar Prasad, professor of trade economics at Cornell University, warned that the disagreement could escalate. “These protectionist measures, some of which amount to domestic political posturing rather than substantive restraints on trade, could easily ratchet up into a full-blown trade war and inflict serious economic damage on both countries,” he said.
Betting this will end up with trade sanctions against the US in the end as the WTO rules against us once again due to our protectionist bent. I'm pretty disappointed in Obama, since he hired some of the most brilliant minds in economics to help him...and then ignored their advice in favor of trying to curry favor with unions again. Policies like this have helped make union a dirty word in the US, so I have a hard time feeling sorry for their decline.
I work with unions as part of my job, and I have to say that 95% of their lack of support is self-inflicted. This is a good example. The world is drastically different than it was in 1930.
In his first big test on world trade since taking office in January, Mr Obama sided with America’s trade unions, which have complained that a “surge” in imports of Chinese-made tyres had caused 7,000 job losses among US factory workers.
Wow, if that figure is correct Obama is even dumber than I thought. He sparked a trade war over 7,000 jobs? And just before the G20 summit? Wow, just wow.
I think generally free trade should be promoted and exceptions against free trade should only occur if you can prove a valid complaint.
A valid complaint would be something like "they get subsidies to make tires in china"
or
"they rape the environment to produce those tires at that price"
or
"the tires are unsafe"
"it's costing us jobs" is not a valid complaint....if that's the reasoning why do we allow imports of everything else from china?
I personally am ecstatic when foreign governments spend money so that we get more goods for cheaper.
I think you'd find the general consensus to be against you on this. Would you really be ecstatically happy if china subsidized tire production till every tire manufacturing plant in the US shut down because of it? Then china could reduce their tires subsidies and still control tire production...in the long run you don't end up saving much money on tires and your countries workers get fucked....then imagine china repeats this process for every other product.
Whichever country can produce something the most efficiently should be the one to produce it. We have whole threads about agriculture subsidies fucking things up.
And the talk at the last G20/G8 summits was that the world needs to work together to improve the economy. Every country could impose tariffs on imports to try and protect their domestic production, but if everyone imposes tariffs who do you sell to? Trade is important to every country and the world leaders promised not to be protectionist and not to give in to local pressure from job losses.
And for the record:
The practice of selling goods abroad below the price charged for the same goods in the domestic market or at a price below the cost of production, usually with the aim of driving competitors out of the market.
Dumping is considered to be an unfair trade practice and, as such, is prohibited under many national trade laws.
Obama made the wrong decision here. I can't find any evidence that China is dumping.
The US has unfairly imposed tariffs on Canadian products like soft lumber and each time the US is eventually ruled against in trade court and has to pay a hefty fine....but damage is still done. Canada doesn't start a hissy-fit / tariff war like China is threatening, we just beg and cry to your deaf ears till you're ruled against in court and relent.
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ChanusHarbinger of the Spicy Rooster ApocalypseThe Flames of a Thousand Collapsed StarsRegistered Userregular
In his first big test on world trade since taking office in January, Mr Obama sided with America’s trade unions, which have complained that a “surge” in imports of Chinese-made tyres had caused 7,000 job losses among US factory workers.
Wow, if that figure is correct Obama is even dumber than I thought. He sparked a trade war over 7,000 jobs? And just before the G20 summit? Wow, just wow.
I don't have a linky because I read it in the paper (maybe you can find it on www.times-dispatch.com ), but I think it's only something like 35,000 total jobs in the US -- or something like 0.0002% of US jobs.
In his first big test on world trade since taking office in January, Mr Obama sided with America’s trade unions, which have complained that a “surge” in imports of Chinese-made tyres had caused 7,000 job losses among US factory workers.
Wow, if that figure is correct Obama is even dumber than I thought. He sparked a trade war over 7,000 jobs? And just before the G20 summit? Wow, just wow.
This is not a trade war, in by itself. There's a long way to go before that.
Which is still a possibility, mind you, but this by itself is NOT a trade war.
I think generally free trade should be promoted and exceptions against free trade should only occur if you can prove a valid complaint.
A valid complaint would be something like "they get subsidies to make tires in china"
or
"they rape the environment to produce those tires at that price"
or
"the tires are unsafe"
"it's costing us jobs" is not a valid complaint....if that's the reasoning why do we allow imports of everything else from china?
I personally am ecstatic when foreign governments spend money so that we get more goods for cheaper.
I think you'd find the general consensus to be against you on this. Would you really be ecstatically happy if china subsidized tire production till every tire manufacturing plant in the US shut down because of it? Then china could reduce their tires subsidies and still control tire production...in the long run you don't end up saving much money on tires and your countries workers get fucked....then imagine china repeats this process for every other product.
Well, we already have the WTO to make rulings against actual dumping. And repealing subsidies once enacted is a little easier said than done (hi corn subsidies/sugar tariffs!). And tire manufacturing of all things isn't something that I'd imagine has high barriers to entry, so no, I don't really care. If the Chinese government wants to piss away their tax revenue so that I get cheap tires, bring them on. I mean, same thing with our absurd corn subsidies, nations like Singapore reap the benefits of it while we pay the costs.
And the talk at the last G20/G8 summits was that the world needs to work together to improve the economy. Every country could impose tariffs on imports to try and protect their domestic production, but if everyone imposes tariffs who do you sell to? Trade is important to every country and the world leaders promised not to be protectionist and not to give in to local pressure from job losses.
But, but UNION JOBS! Seriously, for someone who used change as a meme, Obama sure seems content to just blindly placate the vocal parts of the Deomcratic consitutuency. I supported him in both the primary and the general, but things like this are disappointing to say the least.
The US has unfairly imposed tariffs on Canadian products like soft lumber and each time the US is eventually ruled against in trade court and has to pay a hefty fine....but damage is still done. Canada doesn't start a hissy-fit / tariff war like China is threatening, we just beg and cry to your deaf ears till you're ruled against in court and relent.
Yeah, but China is pushing to be a superpower (if they aren't already) and has export markets apart from the US (Canada does as well, but to a far lesser extent IIRC). They have every motive to rub this in our faces, since we are the ones being jackasses here and they can eke out some advantages from doing so.
Huh, okay. The "federal trade panel" is the US ITC. How nonpartisan is it, in reality?
Not sure, but typically [If Stiglitz is to be believed on the matter] trade panels of this sort regularly rule in favor of the developed nations. This may be because Stiglitz has a predilection towards correcting perceived demand externalities in developing nations[I.E. he weighs the value of extra demand in developing nations as worth more than slack in developed], it may be because there are legitimate complaints that are being filed [for instance, if China really is subsidizing these then it makes sense to have a tariff to offset that, so long as its only offsetting and conditioned on the subsidy being there], it may be because they have a U.S. bias in actuality[or that each trade commission has a bias for whatever the current domestic proclivity is; ruling for "their" industries without considering the international ramifications] , or it may be some combination of all three.
Which one or combination i am not sure, but i am relatively sure that these commissions cannot be removed from political pressures of all sorts and do typically end up "siding" with the U.S. industries rather than foreign industries. Whatever the case, its a safe bet that Obama will be hiding behind the commissions report such that he does not have to bear the brunt of the decision.
There should be tariffs on Chinese companies who fuck over their employees for every penny possible just because they can. In a sense, tariffs are bad because it keeps third world people from earning the few pennies they can. But they are also good because it prevents the perpetuation of the third-world exploitation of people who have no choice. What us first-world consumers ought to do is reject merch and wares from really exploitative and worker-abusing factories and impose traiffs only on them, while keeping a lopsided but at least not completely indecent market relationship with third-world producers that behave decently. Incentivize, naam sayin'?
This only works if the tariff is offsetting AND there actually is an efficiency problem. Most likely the companies are not fucking over their employees for every penny possible and a providing an opportunity that would not be there otherwise. In general, outsourcing is good for those countries and the people specifically, and not just in a cynical way. [There are some caveats to this, dealing with being in the middle spectrum which can generate some legitimate complaints, but i feel they are unwarranted since the problems that are ascribed essentially come with being "too wealthy" and well, not working and being more wealthy is better than working and being poorer. E.G. Mexico losing its production imports into the US to China]
due to the difficulty in determining whether or not its happening, i have a feeling that we could better spend the money for that purpose by doing something else.
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ChanusHarbinger of the Spicy Rooster ApocalypseThe Flames of a Thousand Collapsed StarsRegistered Userregular
edited September 2009
Anyone listen to his speech just now? It addressed this a little bit, but I'm listening at work and couldn't make most of it out.
I did hear something about tossing away the idea that this is protectionist... I wish I could have heard his explanation.
Anyone listen to his speech just now? It addressed this a little bit, but I'm listening at work and couldn't make most of it out.
I did hear something about tossing away the idea that this is protectionist... I wish I could have heard his explanation.
No protectionist just says 'hey I am protectionist'. They always gussy it up in some noble rhetoric about helping the impoverished masses, preventing ecological devestation or some other Good. Obama would be insane to just be like 'its political manuevering to retain support with a strongly Democrat aligned interest group'
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ChanusHarbinger of the Spicy Rooster ApocalypseThe Flames of a Thousand Collapsed StarsRegistered Userregular
Anyone listen to his speech just now? It addressed this a little bit, but I'm listening at work and couldn't make most of it out.
I did hear something about tossing away the idea that this is protectionist... I wish I could have heard his explanation.
No protectionist just says 'hey I am protectionist'. They always gussy it up in some noble rhetoric about helping the impoverished masses, preventing ecological devestation or some other Good. Obama would be insane to just be like 'its political manuevering to retain support with a strongly Democrat aligned interest group'
Well, yeah... but what he said after was probably important or enlightening in some sense and I missed it.
Honestly the correct thing here would be to go to the Chinese and say "Any products of yours which are made in humane conditions in accordance with a reasonable level of environmental responsibility shall receive a reduced import tax. Those which do not, shall recieve an increased tax. We accept the same standards on our own goods. We will set up a joint commitee to decide these standards, which shall be reviewed each 4 years."
If they say no to that, it's just them being dicks and clearly attempting the very thing tarifs do exist to present (economic warfare to destroy competition out of an intent to exploit later)
Honestly the correct thing here would be to go to the Chinese and say "Any products of yours which are made in humane conditions in accordance with a reasonable level of environmental responsibility shall receive a reduced import tax. Those which do not, shall recieve an increased tax. We accept the same standards on our own goods. We will set up a joint commitee to decide these standards, which shall be reviewed each 4 years."
If they say no to that, it's just them being dicks and clearly attempting the very thing tarifs do exist to present (economic warfare to destroy competition out of an intent to exploit later)
The only reason to create such a system is to impose American environmental and humanitarian values upon the Chinese. Which the Chinese of course would reject, just as we would do were the situations reversed. That isn't being a dick, unless you call looking out for the welfare of your citizens being a dick.
Honestly the correct thing here would be to go to the Chinese and say "Any products of yours which are made in humane conditions in accordance with a reasonable level of environmental responsibility shall receive a reduced import tax. Those which do not, shall recieve an increased tax. We accept the same standards on our own goods. We will set up a joint commitee to decide these standards, which shall be reviewed each 4 years."
If they say no to that, it's just them being dicks and clearly attempting the very thing tarifs do exist to present (economic warfare to destroy competition out of an intent to exploit later)
The only reason to create such a system is to impose American environmental and humanitarian values upon the Chinese. Which the Chinese of course would reject, just as we would do were the situations reversed. That isn't being a dick, unless you call looking out for the welfare of your citizens being a dick.
Except for the fact that one model of human and environmental rights is correct, and the other is blatantly wrong. This isn't a case of us saying "You must wear blue sweaters and worship ODIN" and them saying "We demand to wear RED and worship ZEUS!' its us saying "Don't work your laborers to death in effectively slavery, and please don't pour 80 billion gallons of mercury in the sea" and them saying "Fuck you! Institutional slavery rocks, and we'll kill anyone who opposes us! Glory to the new rich!"
Honestly the correct thing here would be to go to the Chinese and say "Any products of yours which are made in humane conditions in accordance with a reasonable level of environmental responsibility shall receive a reduced import tax. Those which do not, shall recieve an increased tax. We accept the same standards on our own goods. We will set up a joint commitee to decide these standards, which shall be reviewed each 4 years."
If they say no to that, it's just them being dicks and clearly attempting the very thing tarifs do exist to present (economic warfare to destroy competition out of an intent to exploit later)
Except the tariff was introduced to combat dumping, which is a whole new kettle of fish.
Except for the fact that one model of human and environmental rights is correct, and the other is blatantly wrong. This isn't a case of us saying "You must wear blue sweaters and worship ODIN" and them saying "We demand to wear RED and worship ZEUS!' its us saying "Don't work your laborers to death in effectively slavery, and please don't pour 80 billion gallons of mercury in the sea" and them saying "Fuck you! Institutional slavery rocks, and we'll kill anyone who opposes us! Glory to the new rich!"
Yes and the way to get them to reduce institutional slavery is to demand that they be beholden to our trade standards of course. The expansion of trade in China has largely increased the living conditions of Chinese citizens, and somehow magically without us trying to assert moral authority over them. Also, environmental regulation is not nearly so black and white, and the US has no moral high ground from which to dispense judgement. Environmental regulation in the United States is beholden to a group of constantly warring interest groups composed of varying amount of insanity. To act like we can somehow assert moral authority without there being a massive, and destructive, backlash is absurd.
If we demanded that the Chinese adhere to our current standards, they would rightfully point out that our current standard of living was built on the back of not having to adhere to the standards we are now demanding of them. Cue trade war, in which there are no winners.
What exactly do you think your idea would accomplish? I'll give you a hint, it wouldn't bring China up to US standards of living.
Honestly the correct thing here would be to go to the Chinese and say "Any products of yours which are made in humane conditions in accordance with a reasonable level of environmental responsibility shall receive a reduced import tax. Those which do not, shall recieve an increased tax. We accept the same standards on our own goods. We will set up a joint commitee to decide these standards, which shall be reviewed each 4 years."
If they say no to that, it's just them being dicks and clearly attempting the very thing tarifs do exist to present (economic warfare to destroy competition out of an intent to exploit later)
Except the tariff was introduced to combat dumping, which is a whole new kettle of fish.
Well yes, there are other reasons for tariffs, but the only two I really respect is its use to try and avoid horrific labor standards overseas, and preventing foreign powers attacking you with cheap stuff with an intent to jack up the prices later.
Except for the fact that one model of human and environmental rights is correct, and the other is blatantly wrong. This isn't a case of us saying "You must wear blue sweaters and worship ODIN" and them saying "We demand to wear RED and worship ZEUS!' its us saying "Don't work your laborers to death in effectively slavery, and please don't pour 80 billion gallons of mercury in the sea" and them saying "Fuck you! Institutional slavery rocks, and we'll kill anyone who opposes us! Glory to the new rich!"
Yes and the way to get them to reduce institutional slavery is to demand that they be beholden to our trade standards of course. The expansion of trade in China has largely increased the living conditions of Chinese citizens, and somehow magically without us trying to assert moral authority over them. Also, environmental regulation is not nearly so black and white, and the US has no moral high ground from which to dispense judgement. Environmental regulation in the United States is beholden to a group of constantly warring interest groups composed of varying amount of insanity. To act like we can somehow assert moral authority without there being a massive, and destructive, backlash is absurd.
If we demanded that the Chinese adhere to our current standards, they would rightfully point out that our current standard of living was built on the back of not having to adhere to the standards we are now demanding of them. Cue trade war, in which there are no winners.
What exactly do you think your idea would accomplish? I'll give you a hint, it wouldn't bring China up to US standards of living.
It would prevent US companies having to compete with companies who have a false advantage based on their ability to destroy the environment and work their workers to death. If one company has to follow strict regulations for worker safety and proper disposal of waste and another does not, then the irresponsible company has an advantage which it should not have. Basic human rights and basic standards of environmental responsibility should be non negotiable in US trade partners these days and the US itself should hold itself to the same standards.
Except the tariff was introduced to combat dumping, which is a whole new kettle of fish.
A note on this with regards to my post earlier. Typically(or sometimes) dumping complaints are rendered based on the costs of the country they are being shipped to. I.E. the U.S. gets to complain that china is undercutting its own costs because U.S. firms can't compete.
It would prevent US companies having to compete with companies who have a false advantage based on their ability to destroy the environment and work their workers to death. If one company has to follow strict regulations for worker safety and proper disposal of waste and another does not, then the irresponsible company has an advantage which it should not have.
You aren't going to stop them by trying to somehow induce them into signing into some US-centric trade body. Also do countries like Sweden get to cut off all trade with the US because their standards are different than ours? Does Saudi Arabia cut off oil exports because we espouse some acceptance of homosexuality, which as the House of Saud knows is an affront to humanity? All your proposal would do is empower industries to try to rent seek using humanitarian or environmental rhetoric.
Basic human rights and basic standards of environmental responsibility should be non negotiable in US trade partners these days and the US itself should hold itself to the same standards.
There is no standard of human rights rendered unto us from on high, unless you want to hew to the Bible or other religious work. So we work on the margins and try to eke out relative gains in human well being. Arbitrarily forcing our standards on China is not going to do that. Especially when there are considerable disagreements within our country as to what a 'basic human right' is. The death penalty and abortion debates immediately come to mind. Similar issues surround environmental protections.
Freer trade does help human well being at the margins I think. It allows developing countries access to markets, which in turn raises the standard of living. Improved standard of living has thus far generally lead to more human rights and increased awareness of environmental concerns. In addition trade entanglements help aid world peace and stability. It is far more effective in attaining greater human rights and environmental awareness than some dictate by the US.
It would prevent US companies having to compete with companies who have a false advantage based on their ability to destroy the environment and work their workers to death. If one company has to follow strict regulations for worker safety and proper disposal of waste and another does not, then the irresponsible company has an advantage which it should not have.
You aren't going to stop them by trying to somehow induce them into signing into some US-centric trade body. Also do countries like Sweden get to cut off all trade with the US because their standards are different than ours? Does Saudi Arabia cut off oil exports because we espouse some acceptance of homosexuality, which as the House of Saud knows is an affront to humanity? All your proposal would do is empower industries to try to rent seek using humanitarian or environmental rhetoric.
Basic human rights and basic standards of environmental responsibility should be non negotiable in US trade partners these days and the US itself should hold itself to the same standards.
There is no standard of human rights rendered unto us from on high, unless you want to hew to the Bible or other religious work. So we work on the margins and try to eke out relative gains in human well being. Arbitrarily forcing our standards on China is not going to do that. Especially when there are considerable disagreements within our country as to what a 'basic human right' is. The death penalty and abortion debates immediately come to mind. Similar issues surround environmental protections.
Freer trade does help human well being at the margins I think. It allows developing countries access to markets, which in turn raises the standard of living. Improved standard of living has thus far generally lead to more human rights and increased awareness of environmental concerns. In addition trade entanglements help aid world peace and stability. It is far more effective in attaining greater human rights and environmental awareness than some dictate by the US.
Clearly you and I have enormously differing views on the importance of basic human rights. If you genuinely feel that China should be free to enslave millions of its own people and work them to death in an effort to compete then we have nothing in common to discuss.
It is far more effective in attaining greater human rights and environmental awareness than some dictate by the US.
Clearly you and I have enormously differing views on the importance of basic human rights. If you genuinely feel that China should be free to enslave millions of its own people and work them to death in an effort to compete then we have nothing in common to discuss.
There I made things easier for you.
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HarrierThe Star Spangled ManRegistered Userregular
edited September 2009
Honestly, I think Obama made the right call here. In fact, he imposed a lower tariff than the ITC recommended.
And the slavish adherence to the idea of free trade in this thread mystifies me.
Harrier on
I don't wanna kill anybody. I don't like bullies. I don't care where they're from.
Honestly, I think Obama made the right call here. In fact, he imposed a lower tariff than the ITC recommended.
And the slavish adherence to the idea of free trade in this thread mystifies me.
Tariff was needed but the explanation/reasoning given was dumb.
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Our country is now taking so steady a course as to show by what road it will pass to destruction, to wit: by consolidation of power first, and then corruption, its necessary consequence --Thomas Jefferson
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HarrierThe Star Spangled ManRegistered Userregular
Honestly, I think Obama made the right call here. In fact, he imposed a lower tariff than the ITC recommended.
And the slavish adherence to the idea of free trade in this thread mystifies me.
Tariff was needed but the explanation/reasoning given was dumb.
Perhaps to you.
Some of us aren't opposed to protectionist trade policies.
Not on the whole, no... but right now it's a really dumb idea to antagonize the country that owns you for the sake of a union trying to protect a non-existent industry.
It is far more effective in attaining greater human rights and environmental awareness than some dictate by the US.
Clearly you and I have enormously differing views on the importance of basic human rights. If you genuinely feel that China should be free to enslave millions of its own people and work them to death in an effort to compete then we have nothing in common to discuss.
There I made things easier for you.
This is only true when doing business with an inclusive democracy. China is effectively an exclusive elite class who has managed to use its control of the political process to enslave the rest of the country. Dealing fairly with them will simply make them richer, and do nothing for work conditions.
Honestly, I think Obama made the right call here. In fact, he imposed a lower tariff than the ITC recommended.
And the slavish adherence to the idea of free trade in this thread mystifies me.
Tariff was needed but the explanation/reasoning given was dumb.
Perhaps to you.
Some of us aren't opposed to protectionist trade policies.
Protectionism is dumb.
It is indeed true to say that attempting to protect your industry against one which is fairly better is pointless, and can never be sustained. However in this case the competition is not dealing fairly.
Clearly you and I have enormously differing views on the importance of basic human rights. If you genuinely feel that China should be free to enslave millions of its own people and work them to death in an effort to compete then we have nothing in common to discuss.
You think that by keeping them at a disadvantage economically, they're going to raise their own costs to protect human rights?
That's incredibly backwards. Think only economically. You are making money by reducing costs. Your costs are reduced because you don't have to spend any money on worker safety or conditions. Someone artificially inflates your cost.
The first thing you're going to do isn't raising working conditions. You'll be looking to lower costs some other way to remain competitive.
Free trade is important, and the idea that a protectionist tariff is in some way working towards human rights is pretty flawed.
If you want to sell stuff in our country, those goods need to meet our standards. We don't allow lead in foreign products, and we shouldn't allow products made without worker standards.
If you want to sell stuff in our country, those goods need to meet our standards. We don't allow lead in foreign products, and we shouldn't allow products made without worker standards.
Precisely what I was trying to say. If they could save a few pence by making cars which ran on leaded fuel we wouldn't allow them, and noone would be foolish enough to say this would impact the quality of life of their workers.
It is far more effective in attaining greater human rights and environmental awareness than some dictate by the US.
Clearly you and I have enormously differing views on the importance of basic human rights. If you genuinely feel that China should be free to enslave millions of its own people and work them to death in an effort to compete then we have nothing in common to discuss.
There I made things easier for you.
This is only true when doing business with an inclusive democracy. China is effectively an exclusive elite class who has managed to use its control of the political process to enslave the rest of the country. Dealing fairly with them will simply make them richer, and do nothing for work conditions.
And yet, per capita income has increased in real terms, poverty rates have fallen off and the Gini coefficient isn't much worse than ours. Clearly free trade has hurt the Chinese citizen and has failed to make their life better. The main detriment to the Chinese is they cannot industrialize fast enough and so they allow huge swathes of their population to languish in an ineffecient agricultural sector due to fears of widespread unemployment if they attempted to modernize it.
So can Sweden now justify punative tariffs on the US because they have far less income inequality and in general higher societal welfare? Are they justified in forcing us into some trade agreement structure whereby they get to dictate how we conduct business? Or is that right earned only through the size of our economy?
Precisely what I was trying to say. If they could save a few pence by making cars which ran on leaded fuel we wouldn't allow them, and noone would be foolish enough to say this would impact the quality of life of their workers.
We disallow lead in things because it causes demonstrable harm to US consumers. Something that isn't at all true about allowing Chinese tire imports. I mean, what is your argument here? That we have a vested interest in ensuring the safety of goods sold in the US? I don't disagree, but there is no evidence that these tires were unsafe.
It is far more effective in attaining greater human rights and environmental awareness than some dictate by the US.
Clearly you and I have enormously differing views on the importance of basic human rights. If you genuinely feel that China should be free to enslave millions of its own people and work them to death in an effort to compete then we have nothing in common to discuss.
There I made things easier for you.
This is only true when doing business with an inclusive democracy. China is effectively an exclusive elite class who has managed to use its control of the political process to enslave the rest of the country. Dealing fairly with them will simply make them richer, and do nothing for work conditions.
And yet, per capita income has increased in real terms, poverty rates have fallen off and the Gini coefficient isn't much worse than ours. Clearly free trade has hurt the Chinese citizen and has failed to make their life better. The main detriment to the Chinese is they cannot industrialize fast enough and so they allow huge swathes of their population to languish in an ineffecient agricultural sector due to fears of widespread unemployment if they attempted to modernize it.
So can Sweden now justify punative tariffs on the US because they have far less income inequality and in general higher societal welfare? Are they justified in forcing us into some trade agreement structure whereby they get to dictate how we conduct business? Or is that right earned only through the size of our economy?
Precisely what I was trying to say. If they could save a few pence by making cars which ran on leaded fuel we wouldn't allow them, and noone would be foolish enough to say this would impact the quality of life of their workers.
We disallow lead in things because it causes demonstrable harm to US consumers. Something that isn't at all true about allowing Chinese tire imports. I mean, what is your argument here? That we have a vested interest in ensuring the safety of goods sold in the US? I don't disagree, but there is no evidence that these tires were unsafe.
We don't have to sell in Sweeden if we don't want to, and I don't see why they shouldn't try to keep companies that operate to their cultural standards in business. That's not forcing us into a trade agreement, that's setting domestic trade standards.
Clearly you and I have enormously differing views on the importance of basic human rights. If you genuinely feel that China should be free to enslave millions of its own people and work them to death in an effort to compete then we have nothing in common to discuss.
You think that by keeping them at a disadvantage economically, they're going to raise their own costs to protect human rights?
That's incredibly backwards. Think only economically. You are making money by reducing costs. Your costs are reduced because you don't have to spend any money on worker safety or conditions. Someone artificially inflates your cost.
The first thing you're going to do isn't raising working conditions. You'll be looking to lower costs some other way to remain competitive.
Free trade is important, and the idea that a protectionist tariff is in some way working towards human rights is pretty flawed.
Then why do we fine companies that are in violation of OSHA standards? clearly they're just going to cut costs further to pay for it rather than coming into compliance.
Posts
I think the problem a lot of people on both sides of the issue have is exploitation and low wages relative to the US are not the same thing or even necessarily related.
Cheap third world production is, fairly legitimately, the greatest force for good we can reasonably bring to bear in those countries. It's a relatively virtuous cycle, where production comes into a completely economically decimated area at wages that are a rounding error anywhere else, build up the economy, infrastructure, and skill set of the population which leads to more businesses coming in and secondary businesses serving the people who are working these new jobs etc etc.
Unfortunately they aren't going to have many (any) benefits or labor laws when the number of paying jobs is several orders of magnitude less than the population, which leads to conditions we would find intolerable anywhere in the first world even before you get into businesses that abuse the already overwhelmingly lax worker protections in what anyone would call exploitation. The best way to combat that isn't some sort of from above moral scheme (as immensely satisfying and as deserved as that may be). It's a combination of social pressure (the whole clothing/sweatshop movement is the model here) and continued economic investment. Don't try and stop the company from working there, because you're just hurting the population and delaying the time when the workers will be economically strong enough to demand concessions, but shame the companies into improving conditions while staying where they are.
There are very few areas where I think the left has significant groups that are simply dogmatically wrong, but globalization is the biggie (the other one being nuclear power).
I mean, I don't disagree with the decision to implement the tariff, but we do ship stuff to China besides boatloads of cash, and naturally, they're well within their rights (both legally and practically) to respond.
Chicken and auto parts. Linky.
By Geoff Dyer in Beijing and Tom Braithwaite in Washington
Published: September 13 2009 06:53 | Last updated: September 14 2009 11:57
A full-blown trade row erupted between the US and China after Beijing accused Washington of “rampant protectionism” for imposing heavy duties on imported Chinese tyres and threatened action against imports of US poultry and vehicles.
Trade relations between two of the world’s biggest economies deteriorated after Barack Obama, US president, signed an order late on Friday to impose a new duty of 35 per cent on Chinese tyre imports on top of an existing 4 per cent tariff.
In his first big test on world trade since taking office in January, Mr Obama sided with America’s trade unions, which have complained that a “surge” in imports of Chinese-made tyres had caused 7,000 job losses among US factory workers.
Chen Deming, China’s minister of commerce, condemned the decision, saying that it “sends the wrong signal to the world” at a time when Washington and Beijing should be co-operating to deal with the worst economic and financial crisis in decades.
“This is a grave act of trade protectionism,” Mr Chen said in a statement. “Not only does it violate WTO rules, it contravenes commitments the US government made at the [April] G20 financial summit.”
Beijing said it had requested WTO-sanctioned consultations with the US over Washington’s new duties on tyres. Yao Jian, a commerce ministry spokesman, said the duties were in ”violation of WTO rules”.
China said it would now investigate imports of US poultry and vehicles, responding to complaints from domestic companies.
The US earlier warned Beijing against taking retaliatory action. “Retaliation would be inappropriate, as the United States acted entirely within the bounds of trade laws and within the safeguard provision that China itself agreed to upon accession to the World Trade Organisation,” said an official from the Office of the United States Trade Representative.
US officials said they were scrutinising the export of poultry and vehicles, but said any action in retaliation by China could result in a complaint by the US to the WTO.
Key Tokyo rubber futures tumbled more than 9 per cent to a three-week low on Monday, according to Reuters. News of the additional duties on US tyre imports from China combined with sharply lower oil prices and a stronger yen to push Tokyo rubber futures prices below Y200 a kilogramme.
The dispute comes less than a fortnight before Mr Obama is due to host world leaders at a summit of G20 nations in Pittsburgh and ahead of his planned visit to China in November.
The decision to impose extra tyre tariffs followed a petition by the United Steelworkers union, which represents workers at many US tyre factories. Official US figures show an increase in imports by volume from 14.6m tyres in 2004 to 46m in 2008. The US data shows that the value of tyre imports from China increased from $453.3m in 2004 to $1.8bn in 2008. Four US plants closed in 2006 and 2007 and three more are likely to be closed this year. US production capacity has fallen by 17.8 per cent in the past four years, according to the official data.
Eswar Prasad, professor of trade economics at Cornell University, warned that the disagreement could escalate. “These protectionist measures, some of which amount to domestic political posturing rather than substantive restraints on trade, could easily ratchet up into a full-blown trade war and inflict serious economic damage on both countries,” he said.
I work with unions as part of my job, and I have to say that 95% of their lack of support is self-inflicted. This is a good example. The world is drastically different than it was in 1930.
Wow, if that figure is correct Obama is even dumber than I thought. He sparked a trade war over 7,000 jobs? And just before the G20 summit? Wow, just wow.
I think you'd find the general consensus to be against you on this. Would you really be ecstatically happy if china subsidized tire production till every tire manufacturing plant in the US shut down because of it? Then china could reduce their tires subsidies and still control tire production...in the long run you don't end up saving much money on tires and your countries workers get fucked....then imagine china repeats this process for every other product.
Whichever country can produce something the most efficiently should be the one to produce it. We have whole threads about agriculture subsidies fucking things up.
And the talk at the last G20/G8 summits was that the world needs to work together to improve the economy. Every country could impose tariffs on imports to try and protect their domestic production, but if everyone imposes tariffs who do you sell to? Trade is important to every country and the world leaders promised not to be protectionist and not to give in to local pressure from job losses.
And for the record:
Dumping is considered to be an unfair trade practice and, as such, is prohibited under many national trade laws.
Obama made the wrong decision here. I can't find any evidence that China is dumping.
The US has unfairly imposed tariffs on Canadian products like soft lumber and each time the US is eventually ruled against in trade court and has to pay a hefty fine....but damage is still done. Canada doesn't start a hissy-fit / tariff war like China is threatening, we just beg and cry to your deaf ears till you're ruled against in court and relent.
I don't have a linky because I read it in the paper (maybe you can find it on www.times-dispatch.com ), but I think it's only something like 35,000 total jobs in the US -- or something like 0.0002% of US jobs.
This is not a trade war, in by itself. There's a long way to go before that.
Which is still a possibility, mind you, but this by itself is NOT a trade war.
Well, we already have the WTO to make rulings against actual dumping. And repealing subsidies once enacted is a little easier said than done (hi corn subsidies/sugar tariffs!). And tire manufacturing of all things isn't something that I'd imagine has high barriers to entry, so no, I don't really care. If the Chinese government wants to piss away their tax revenue so that I get cheap tires, bring them on. I mean, same thing with our absurd corn subsidies, nations like Singapore reap the benefits of it while we pay the costs.
But, but UNION JOBS! Seriously, for someone who used change as a meme, Obama sure seems content to just blindly placate the vocal parts of the Deomcratic consitutuency. I supported him in both the primary and the general, but things like this are disappointing to say the least.
Yeah, but China is pushing to be a superpower (if they aren't already) and has export markets apart from the US (Canada does as well, but to a far lesser extent IIRC). They have every motive to rub this in our faces, since we are the ones being jackasses here and they can eke out some advantages from doing so.
Not sure, but typically [If Stiglitz is to be believed on the matter] trade panels of this sort regularly rule in favor of the developed nations. This may be because Stiglitz has a predilection towards correcting perceived demand externalities in developing nations[I.E. he weighs the value of extra demand in developing nations as worth more than slack in developed], it may be because there are legitimate complaints that are being filed [for instance, if China really is subsidizing these then it makes sense to have a tariff to offset that, so long as its only offsetting and conditioned on the subsidy being there], it may be because they have a U.S. bias in actuality[or that each trade commission has a bias for whatever the current domestic proclivity is; ruling for "their" industries without considering the international ramifications] , or it may be some combination of all three.
Which one or combination i am not sure, but i am relatively sure that these commissions cannot be removed from political pressures of all sorts and do typically end up "siding" with the U.S. industries rather than foreign industries. Whatever the case, its a safe bet that Obama will be hiding behind the commissions report such that he does not have to bear the brunt of the decision.
This only works if the tariff is offsetting AND there actually is an efficiency problem. Most likely the companies are not fucking over their employees for every penny possible and a providing an opportunity that would not be there otherwise. In general, outsourcing is good for those countries and the people specifically, and not just in a cynical way. [There are some caveats to this, dealing with being in the middle spectrum which can generate some legitimate complaints, but i feel they are unwarranted since the problems that are ascribed essentially come with being "too wealthy" and well, not working and being more wealthy is better than working and being poorer. E.G. Mexico losing its production imports into the US to China]
due to the difficulty in determining whether or not its happening, i have a feeling that we could better spend the money for that purpose by doing something else.
I did hear something about tossing away the idea that this is protectionist... I wish I could have heard his explanation.
No protectionist just says 'hey I am protectionist'. They always gussy it up in some noble rhetoric about helping the impoverished masses, preventing ecological devestation or some other Good. Obama would be insane to just be like 'its political manuevering to retain support with a strongly Democrat aligned interest group'
Well, yeah... but what he said after was probably important or enlightening in some sense and I missed it.
Anyone else actually hear the speech?
Can trade TF2 items or whatever else you're interested in. PM me.
If they say no to that, it's just them being dicks and clearly attempting the very thing tarifs do exist to present (economic warfare to destroy competition out of an intent to exploit later)
The only reason to create such a system is to impose American environmental and humanitarian values upon the Chinese. Which the Chinese of course would reject, just as we would do were the situations reversed. That isn't being a dick, unless you call looking out for the welfare of your citizens being a dick.
Except for the fact that one model of human and environmental rights is correct, and the other is blatantly wrong. This isn't a case of us saying "You must wear blue sweaters and worship ODIN" and them saying "We demand to wear RED and worship ZEUS!' its us saying "Don't work your laborers to death in effectively slavery, and please don't pour 80 billion gallons of mercury in the sea" and them saying "Fuck you! Institutional slavery rocks, and we'll kill anyone who opposes us! Glory to the new rich!"
Except the tariff was introduced to combat dumping, which is a whole new kettle of fish.
Yes and the way to get them to reduce institutional slavery is to demand that they be beholden to our trade standards of course. The expansion of trade in China has largely increased the living conditions of Chinese citizens, and somehow magically without us trying to assert moral authority over them. Also, environmental regulation is not nearly so black and white, and the US has no moral high ground from which to dispense judgement. Environmental regulation in the United States is beholden to a group of constantly warring interest groups composed of varying amount of insanity. To act like we can somehow assert moral authority without there being a massive, and destructive, backlash is absurd.
If we demanded that the Chinese adhere to our current standards, they would rightfully point out that our current standard of living was built on the back of not having to adhere to the standards we are now demanding of them. Cue trade war, in which there are no winners.
What exactly do you think your idea would accomplish? I'll give you a hint, it wouldn't bring China up to US standards of living.
Well yes, there are other reasons for tariffs, but the only two I really respect is its use to try and avoid horrific labor standards overseas, and preventing foreign powers attacking you with cheap stuff with an intent to jack up the prices later.
It would prevent US companies having to compete with companies who have a false advantage based on their ability to destroy the environment and work their workers to death. If one company has to follow strict regulations for worker safety and proper disposal of waste and another does not, then the irresponsible company has an advantage which it should not have. Basic human rights and basic standards of environmental responsibility should be non negotiable in US trade partners these days and the US itself should hold itself to the same standards.
A note on this with regards to my post earlier. Typically(or sometimes) dumping complaints are rendered based on the costs of the country they are being shipped to. I.E. the U.S. gets to complain that china is undercutting its own costs because U.S. firms can't compete.
Yes, that is as dumb as it sounds
You aren't going to stop them by trying to somehow induce them into signing into some US-centric trade body. Also do countries like Sweden get to cut off all trade with the US because their standards are different than ours? Does Saudi Arabia cut off oil exports because we espouse some acceptance of homosexuality, which as the House of Saud knows is an affront to humanity? All your proposal would do is empower industries to try to rent seek using humanitarian or environmental rhetoric.
There is no standard of human rights rendered unto us from on high, unless you want to hew to the Bible or other religious work. So we work on the margins and try to eke out relative gains in human well being. Arbitrarily forcing our standards on China is not going to do that. Especially when there are considerable disagreements within our country as to what a 'basic human right' is. The death penalty and abortion debates immediately come to mind. Similar issues surround environmental protections.
Freer trade does help human well being at the margins I think. It allows developing countries access to markets, which in turn raises the standard of living. Improved standard of living has thus far generally lead to more human rights and increased awareness of environmental concerns. In addition trade entanglements help aid world peace and stability. It is far more effective in attaining greater human rights and environmental awareness than some dictate by the US.
Clearly you and I have enormously differing views on the importance of basic human rights. If you genuinely feel that China should be free to enslave millions of its own people and work them to death in an effort to compete then we have nothing in common to discuss.
There I made things easier for you.
And the slavish adherence to the idea of free trade in this thread mystifies me.
Tariff was needed but the explanation/reasoning given was dumb.
Some of us aren't opposed to protectionist trade policies.
Not on the whole, no... but right now it's a really dumb idea to antagonize the country that owns you for the sake of a union trying to protect a non-existent industry.
This is only true when doing business with an inclusive democracy. China is effectively an exclusive elite class who has managed to use its control of the political process to enslave the rest of the country. Dealing fairly with them will simply make them richer, and do nothing for work conditions.
Protectionism is dumb.
It is indeed true to say that attempting to protect your industry against one which is fairly better is pointless, and can never be sustained. However in this case the competition is not dealing fairly.
You think that by keeping them at a disadvantage economically, they're going to raise their own costs to protect human rights?
That's incredibly backwards. Think only economically. You are making money by reducing costs. Your costs are reduced because you don't have to spend any money on worker safety or conditions. Someone artificially inflates your cost.
The first thing you're going to do isn't raising working conditions. You'll be looking to lower costs some other way to remain competitive.
Free trade is important, and the idea that a protectionist tariff is in some way working towards human rights is pretty flawed.
Precisely what I was trying to say. If they could save a few pence by making cars which ran on leaded fuel we wouldn't allow them, and noone would be foolish enough to say this would impact the quality of life of their workers.
And yet, per capita income has increased in real terms, poverty rates have fallen off and the Gini coefficient isn't much worse than ours. Clearly free trade has hurt the Chinese citizen and has failed to make their life better. The main detriment to the Chinese is they cannot industrialize fast enough and so they allow huge swathes of their population to languish in an ineffecient agricultural sector due to fears of widespread unemployment if they attempted to modernize it.
So can Sweden now justify punative tariffs on the US because they have far less income inequality and in general higher societal welfare? Are they justified in forcing us into some trade agreement structure whereby they get to dictate how we conduct business? Or is that right earned only through the size of our economy?
We disallow lead in things because it causes demonstrable harm to US consumers. Something that isn't at all true about allowing Chinese tire imports. I mean, what is your argument here? That we have a vested interest in ensuring the safety of goods sold in the US? I don't disagree, but there is no evidence that these tires were unsafe.
We don't have to sell in Sweeden if we don't want to, and I don't see why they shouldn't try to keep companies that operate to their cultural standards in business. That's not forcing us into a trade agreement, that's setting domestic trade standards.
Then why do we fine companies that are in violation of OSHA standards? clearly they're just going to cut costs further to pay for it rather than coming into compliance.
Oh, wait, they're not dumb, they're a massive exporting power and the second-largest economy in the world.