U.S. MANUFACTURERS SEE 'MORE OF THE SAME' IN BUSH-HU MEETING
Labor Desk
April 21, 2006
WASHINGTON, DC, April 20, 2006. Despite a mushrooming U.S. trade deficit with China, President Bush failed to take a hard line today on continued subsidies, intellectual property theft, and currency manipulation in a face-to-face meeting with Chinese President Hu Jintao. Kevin L. Kearns, president of the U.S. Business and Industry Council (USBIC), characterized the Bush-Hu meeting as “More of the same do-nothing-to-upset-the-Chinese approach.”
The President failed to make any significant progress in talks with his Chinese counterpart,” said Kearns. “Why does he keep getting rolled by deceptive Chinese promises and more tinkering around the edges? Our $200+ billion trade deficit with China is rather blunt proof that Beijing’s predatory economic practices are hollowing out America's domestic industries. President Bush should have told President Hu that unless China cleans up its trade policy act by a specific date, it will start losing access to the U.S. market.”
Kearns pointed out that the President’s own advisors have acknowledged the need to change America’s losing game on China trade. Earlier this year, U.S. Trade Representative Rob Portman declared that U.S.-China trade relations need to enter “a new phase of greater accountability and enforcement.” Reports from the U.S. Trade Representative’s office also acknowledge that, contrary to the administration’s promises, China’s entry into the World Trade Organization has not brought its protectionism under control. Indeed, USTR admitted in a 2005 report that WTO membership has not significantly reduced China’s theft of intellectual property. USTR’s latest annual report on foreign trade barriers also notes that China has “increasingly resorted to industrial policies that limit market access” for foreign goods but “support increased exports.”
Kearns said that fears of Chinese retaliation against potential American trade remedies are overblown. “China cannot afford to suddenly dump its sizable holdings of U.S. Treasury bills. These purchases have helped sustain the U.S. market in which China desperately needs to sell. If China stops subsidizing American consumption, their home unemployment crisis will worsen. That would threaten the regime’s hold on power.”
The U.S. economy is indeed vulnerable to a pullback of foreign capital overall, Kearns noted. This vulnerability results mainly from America’s huge and rapidly growing global trade and current account deficits. These twin deficits are bound to undermine the nation’s creditworthiness.
The longer China’s protectionism is allowed to continue, the less incentive China will have to correct the serious distortions of its own banking system and broader economy,” said Kearns. “At the same time, ballooning American deficits and net debts could trigger a dollar crisis and a global economic crack-up. This is why President Bush missed a major missed opportunity today to direct Beijing toward a more sustainable economic path that can solidify the entire global economy’s currently shaky foundations.”
The U.S. Business and Industry Council, founded in 1933, is a national business organization comprised of roughly 1,500 small and medium-sized manufacturing companies. For further information, visit www.americaneconomicalert.org.
The President failed to make any significant progress in talks with his Chinese counterpart,” said Kearns. “Why does he keep getting rolled by deceptive Chinese promises and more tinkering around the edges? Our $200+ billion trade deficit with China is rather blunt proof that Beijing’s predatory economic practices are hollowing out America's domestic industries. President Bush should have told President Hu that unless China cleans up its trade policy act by a specific date, it will start losing access to the U.S. market.”
Kearns pointed out that the President’s own advisors have acknowledged the need to change America’s losing game on China trade. Earlier this year, U.S. Trade Representative Rob Portman declared that U.S.-China trade relations need to enter “a new phase of greater accountability and enforcement.” Reports from the U.S. Trade Representative’s office also acknowledge that, contrary to the administration’s promises, China’s entry into the World Trade Organization has not brought its protectionism under control. Indeed, USTR admitted in a 2005 report that WTO membership has not significantly reduced China’s theft of intellectual property. USTR’s latest annual report on foreign trade barriers also notes that China has “increasingly resorted to industrial policies that limit market access” for foreign goods but “support increased exports.”
Kearns said that fears of Chinese retaliation against potential American trade remedies are overblown. “China cannot afford to suddenly dump its sizable holdings of U.S. Treasury bills. These purchases have helped sustain the U.S. market in which China desperately needs to sell. If China stops subsidizing American consumption, their home unemployment crisis will worsen. That would threaten the regime’s hold on power.”
The U.S. economy is indeed vulnerable to a pullback of foreign capital overall, Kearns noted. This vulnerability results mainly from America’s huge and rapidly growing global trade and current account deficits. These twin deficits are bound to undermine the nation’s creditworthiness.
The longer China’s protectionism is allowed to continue, the less incentive China will have to correct the serious distortions of its own banking system and broader economy,” said Kearns. “At the same time, ballooning American deficits and net debts could trigger a dollar crisis and a global economic crack-up. This is why President Bush missed a major missed opportunity today to direct Beijing toward a more sustainable economic path that can solidify the entire global economy’s currently shaky foundations.”
The U.S. Business and Industry Council, founded in 1933, is a national business organization comprised of roughly 1,500 small and medium-sized manufacturing companies. For further information, visit www.americaneconomicalert.org.
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