Posted on 09/25/2003 10:29:48 AM PDT by Willie Green
For education and discussion only. Not for commercial use.
The good news about Sec. of Commerce Don Evans' ballyhooed speech last week about reviving American manufacturing is that it only "previewed" the administrations plans. The final blueprint is set to be released by the end of this month unless it is delayed yet again.
The bad news about the Evans speech is that it contains absolutely nothing that would help U.S. industry and especially domestic companies cope with their main problem: the tidal wave of imports flooding the U.S. economy from rich and poor countries alike.
In fact, if Evans remarks genuinely prefigure the President's manufacturing strategy, the plan could actually harm domestic companies by misdirecting the government's focus and delaying effective action.
The first clue that Evans was way off base came in the speech's stage-setting section, where he literally couldn't decide if manufacturing faced any special problems in the first place. The secretary declared, "I'm not here to gloss over the tough domestic problems we face or to shy away from confronting our international competitors when necessary." In the very next sentence, however, Evans warned against losing "sight of the manufacturing sector's basic strength...."
Evans acknowledged that manufacturing "confronts serious challenges" and "felt the economic slowdown before it reached the rest of the economy." But he insisted that the President's "growth agenda is the right policy to revive our economy and stimulate the additional demand manufacturers need."
The structure of the rest of the speech made clear Evans' substantive and indirectly his political priorities: Talk first about further deregulating the U.S. economy and pretend that it's self-imposed costs that are hurting U.S. industry the most; defend the Bush administration's business-as-usual trade policy of emphasizing foreign market-opening but concentrating on countries too small, poor, broke, or protectionist to be major new markets; and convey toughness by criticizing Chinese protectionism and vowing steadfastly to do something about it at some point.
Evans' decision to slight manufacturing's trade-related problems could not be more mistaken. He and the President can talk all they want about easing domestic business' burdens, but no amount of regulatory and tax relief can help domestic companies subsidized, dumped, and cartelized out of business by foreign campaigns aimed at destroying them.
Moreover, although further regulatory improvements and tax-cutting are always possible, there are strict limits. The basic scale of regulation and taxes in America today reflects our society's strong belief that citizens of genuinely 21st century advanced industrial democracies deserve substantial levels of government protection and resources. Indeed, President Bush and his political advisors know that Americans are not going back to the 19th century, much less to third world safety net levels. And no American should want to.
What Evans did say about trade doesn't even move the needle of effectiveness and would have prompted even more hoots and catcalls than he and two other cabinet members heard on their ill-fated summer-time field trip to the industrial Midwest.
Three problems stick out. First, Evans' tight focus on boosting exports clashes violently with the reality of a world determined not to Buy American. As just shown by the collapse of world trade talks in Cancun, Mexico, America's trade partners aren't remotely interested in trade if it means two-way exchange. Their agendas consist of ramping up exports to America, rejecting any semblance of reciprocity, and in the case of third world countries, seeking more foreign aid.
Second, Evans' promise that "We are going to aggressively target unfair trade practices wherever they occur" begs the question, "What has the administration been waiting for?" True, the president imposed tariffs on imported steel in order to combat rampant subsidization and dumping in that industry. And he has increased farm subsidies in an effort to bargain much larger foreign subsidies way down or out of existence. But rampant subsidization and dumping characterize many global manufacturing industries. Why has the administration ignored these abuses?
Moreover, why has the president put so few resources monitoring and enforcing trade agreements? Will the new Unfair Trade Practices Team and Commerce Department manufacturing czar announced by Evans receive new personnel and funding? Or will existing Commerce trade and manufacturing resources simply be reshuffled and re-named, as preliminary reports indicate? And, why has the United States meekly accepted numerous recent World Trade Organization rulings gutting the U.S. trade laws that represent the main weapons for fighting unfair trade? Pretty soon, Evans' quiver for combating unfair trade practices could be empty.
Third, taking note of all the China complaints bombarding the administration and Congress, Evans promised, "We will work to ensure that China honors the commitments it makes." But his treatment of China made clear that nothing of the kind will happen.
After all, Evans claimed, "China has provided help on a number of fronts from the arms talks with North Korea to the War on Terrorism. On the economic front, China has helped as well, Along with the United States, China accounts for most of the current growth in the world economy. In addition, it is worth underscoring that the Chinese import more from the United States than many of our other trading partners."
Each of these claims is completely false or shamefully misleading. More important, however, they will be used over and over inside and outside the administration to justify answering China's protectionism and predation with tokenism.
Fortunately, the administration will not be able to hide behind rhetoric for long. Whatever the new manufacturing blueprint finally includes, domestic companies and U.S. workers will soon know whether the President is even minimally determined to help manufacturing where it counts, on the trade front. If he imposes safeguard tariffs on wildly excessive Chinese textile and apparel imports, as the WTO permits, and permits the steel tariffs to run their course, his commitment to manufacturing can be considered serious though many more policy changes will still be required. If the President fails these first tests, voters and Congress should dismiss his manufacturing promises as empty.
Alan Tonelson is a Research Fellow at the U.S. Business & Industry Educational Foundation and the author of The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade are Sinking American Living Standards (Westview Press).
Keep up the good work posting these articles.
Bingo. And Evans knows this. Bush's economic team is comprised of nothing more than One World Clowns that are consumed with enriching the 3rd World no matter how much damage it does to America's remaining Industrial Infrastructure or how many good paying American Jobs are lost.
It's all too clear that Bush just doesn't get it.
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