Steve Sachs Duke


Friday, July 25, 2003


Joe Lieberman, nativist? I suppose it should warm my heart that a candidate could visit a New Hampshire manufacturing plant and give a speech opposed to protectionism. But I have to say that I didn't expect "Joe's Jobs Tour" to involve China-bashing. From the news release:

Lieberman pledged that one of his first priorities a President would be to confront the grave challenge from China, which is bending and breaking the rules of free trade and costing American workers jobs. Lieberman said that, while it is to America's benefit--and China's--to maintain a strong relationship, "that relationship has to be based on honesty and fairness. And right now, it's not."

Lieberman, continuing his recently-launched "Joe's Jobs Tour," cited three flagrant areas of violation that are costing American jobs, which he vowed to combat as President:

Counterfeiting. Intellectual property theft costs American businesses at least $200 billion a year--and China is the main offender. "That's wrong, and it's got to stop," said Lieberman.

Workers' Rights. Child labor and forced labor are reportedly rampant in China--exploiting Chinese workers and giving their producers an unearned advantage on the world market.

Currency. China ties the value of its currency to the dollar instead of letting it find its fair value in global currency markets, allowing Chinese products to unfairly undercut their competitors on the world market.

"President Bush must know all this is going on, but he is doing nothing about it," Lieberman said. "I don't know why, unless it's his ideological aversion to having our government do anything to intervene in our economy--even if it is to help American manufacturers and workers. For us, Bush's laissez-faire means "I don't care.'"

Okay--cracking down on WTO violations and forced labor abroad would be a good thing. Not only would it encourage efficiency (and end an abuse for those unjustly forced into labor camps), it would also quell some of the protectionist pressure at home. And devaluing a currency, by making a country's exports cheaper, can be a way of pushing economic weakness onto others. But since when is pegging a currency to the dollar an example of unfair competition? Isn't this what the banks have been encouraging for countries at risk of inflation? (Is Ecuador the next target?)

Maybe China's currency has gotten lower than it should be, and it's hurting other countries' exports as a result. But surely one proximate cause of this imbalance is that we've let the dollar slide. And in any case, the countries that get hurt are those competing for China's export markets, such as Singapore and Thailand--not the US. American producers stand in the same relation to Chinese producers as they did before; China hasn't devalued its currency with regard to us, for the simple reason that they haven't changed their peg.

I suppose this might be just some political red meat, thrown to a voting bloc that's not normally sympathetic to free-traders. But doesn't it sound just a little odd when a candidate blames job losses on "Chinese currency manipulation"?




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