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Time to Wield the Foreign Policy Stick

Map of China (source: CIA World Factbook)

America plays the role of abused partner in its relationship with China. Although the Asian giant repeatedly injures U.S. industry by violating international trade rules, America has responded, almost exclusively, by pleading and begging for China to stop.

China says it’s sorry. And continues to violate the rules. America respectfully beseeches China to discontinue manipulating its currency, and China says it will. Then it allows the value to increase a completely insignificant amount. Still America does nothing. Nothing. It simply accepts the abuse.

U.S. Sen. Bob Casey, D-Pa., and Michael Williams, senior vice president of U.S. Steel stood with me Wednesday at a press conference in Pittsburgh to urge President Obama in his meetings this week with Chinese President Hu Jintao to announce that America is done with soft talk. We want President Obama to tell President Hu that America has heard enough promises; the United States is bucking up and pulling out that big stick that Teddy Roosevelt carried in foreign policy negotiations.

This is a rare issue on which politicians, Republican and Democrat, manufacturers and organized labor all agree. Here’s what Sen. Casey said at the press conference, “In my estimation, and that of a lot of Americans, the time for talking is over. The time for action is now.” He, Sen. Sherrod Brown, D-Ohio, and Sen. Debbie Stabenow, D-Mich., plan to introduce legislation next week to force the federal government to hold China accountable, to enforce compliance with World Trade Organization (WTO) rules – rules that China agreed to comply with when WTO countries permitted it to join even though it is a non-market economy.  . . .

Mr. Williams described the effect of China’s unchallenged trade practices on American steel production:

“Our facilities in Pennsylvania and throughout the United States are among the most advanced in the world:

  • We make the highest quality steel for the most demanding applications;
  • Our technology is world competitive; and
  • Our workers are second to none in skill and know-how.

However, the more than 21,000 U.S. Steel employees nationwide, and the more than 4,700 employees here in Pennsylvania, know all too well that we do not always operate in a fair global marketplace. Instead, we are often faced with the reality of a distorted market – a market where we have to compete against job-stealing dumped and subsidized imports from countries that abuse the rules to gain a false competitive advantage.

No country more than China hurts all American manufacturing by the way it artificially undervalues its currency – making its exports artificially cheap and making competitive imports from the U.S. and elsewhere artificially expensive.”

Here are the facts: American industries have found that they can produce products, ship them to China and price them lower than Chinese competitors. But all too often, China prohibits sale of the American-made products on the mainland.

Sen. Casey gave an example, C.F. Martin & Co., which manufacturers its world-famous guitars in Eastern Pennsylvania. Martin tried to register its mark to sell its instruments in China. But it has been unable to do that because a Chinese manufacturer already registered the mark and is counterfeiting the guitars. “To say it is unlawful does not begin to describe the gravity of it,” the senator said.

In addition to countenancing counterfeiting, China provides illegal subsidies to its export industries, violates international regulations forbidding forced technology transfer when American companies seek to manufacture in China and deliberately undervalues its currency to falsely lower the price of its exports.

When Mr. Williams, Sen. Casey and I all said this must be stopped with enforcement of international regulations, someone in the audience asked if that would prompt a dreaded trade war. That won’t happen because we already are in a trade war. The United States simply is not fighting back. We are playing the passive partner in a perverted relationship, repeatedly allowing the abuser to pound us.

Mr. Williams said it best:

“U.S. Steel wants a strong America. To have a strong America, we need a strong manufacturing base. To have a strong manufacturing base, we need strong enforcement of international trade regulations.”

Sen. Casey agreed, “Our government must take every step necessary. It is not enough to say to the unemployed, ‘We are trying and we are asking.’”

Wield the stick, President Obama.

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Leo W. Gerard

Leo W. Gerard

Leo W. Gerard, International President of the United Steelworkers (USW - United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union) is in his second full term since being elected in 2005. The USW, the largest manufacturing union in North America,represents 1.2 million active and retired industrial and service sector workers in the U.S., Canada, Puerto Rico and the Virgin Islands.
Under Leo's leadership, the USW’s executive board launched a nationwide mobilization to gain congressional support for health insurance reform, the Employee Free Choice Act, the economic stimulus bill that includes a ‘Buy American’ provision to promote job creation, and climate protection legislation that serves working families.
In 2008, he signed a merger agreement creating the first trans-Atlantic union with leaders of the UK-based manufacturing union called Unite. The new global union, ‘Workers Uniting’ (www.workersuniting.org), is a fully functional and registered trade union in the UK, U.S., Ireland and Canada.
He serves on the AFL-CIO's Executive Council (www.aflcioi.org), where he chairs the AFL-CIO's Public Policy Committee. He serves on the U.S. National Commission on Energy Policy, and is a charter board member of the Apollo Alliance (www.apolloalliance.org), a non-profit public policy initiative for creating good jobs in pursuit of energy independence.
Gerard is a founding partner in 2006 with the Sierra Club of the Blue Green Alliance (www.bluegreenalliance.org), which today includes the Natural Resources Defense Council and four other unions dedicated to expanding jobs in the green economy. He also helped create the Washington-based Alliance for American Manufacturing (www.americanmanufacturing.org), a unique non-partisan, non-profit partnership forged to strengthen manufacturing in the U.S. that’s made up of America's leading manufacturers and the USW.

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