America's woes cannot be relieved unless solid, sustainable economic growth is restored at home. The 1,900 domestic manufacturers of the U.S. Business and Industry Council called on President Obama to address America's withering economy last week, urging him to refocus his international trade policies on combating foreign protectionism and addressing America's depleting manufacturing base.
While the rest of the world cries foul on U.S. Buy-American policies, America still remains
the gold standard of openness. Foreign protectionists have added numerous new trade barriers recently, yet the the U.S. continues to fervently apologize for adding necessary protectionist measures favoring our manufacturers.
Many countries have raised import duties or passed stimulus measures with trade distorting subsidies. In a report released last week, the World Bank said that since November, 17 members of the Group of 20 have adopted 47 measures aimed at restricting trade.
“Russia has raised tariffs on used cars. China has tightened import standards on food, banning Irish pork, among other things. India has banned Chinese toys. Argentina has tightened licensing requirements on auto parts, textiles and leather goods. And a dozen countries, are subsidizing embattled automakers or car dealers,” according to the New York Times.
According to USBIC President Kevin L. Kearns, “It's high time for President Obama to stop apologizing to the world's real protectionists and take concrete steps to end their longstanding unfair trade practices – practices that have killed so many American factories and good jobs, and that have produced the worldwide imbalances at the heart of the global recession.”
The only way out of this crisis is through production. America needs to produce in domestic manufacturing firms, which will provide good jobs for Americans and safe products for American consumers. The U.S. can no longer sustain itself off of toxic imports from China and shipping American jobs overseas.
“[Our trading partners] free ride has to end if the American and global economies are to resume sustainable growth,” Kearns said. “Anything less would merely create a new worldwide economic bubble that bursts with even more devastating consequences in the not-too-distant future. Either President Obama puts a halt to America’s over-consumption of subsidized foreign goods with over-borrowed foreign cash, or his recovery plan fails. It’s that simple.”
As witnessed by recent events, it is apparent that foreign governments are going to protest against increased protectionist measures in the U.S. as they have grown accustomed to America's free market.
However, as the world lambastes protectionism implying that increasing trade barriers will spark a trade war, TradeReform.org brings up an interesting point. According to the Web site, “Trade disputes occur every year. New cases are filed at the WTO every year...Countries change rules that affect domestic and imported goods every year. Is this year worse?”
According to TradeReform.org the answer is no. Protectionism was okay as long as the U.S. was opening its borders, reducing tariffs and ignoring unsafe imports. As soon as the U.S. began taking a moderate interest in protecting its own country, however, a spark was ignited and the world cried “trade war” despite the fact that the U.S. has been in a trade war for decades.
Our country must begin setting its sights on long-term economic growth instead of maintaining its shortsighted goals. The Buy-American provisions in the stimulus bill “represent the bare minimum needed to stem a crisis caused largely by our country's under-producing, over-importing, and over-consuming, and by the fake, debt-fueled prosperity to fill the gap,” Kearns said.
President Obama needs to become the agent of change he portrayed himself to be during the campaign. He must use new trade policies to rebuild America's productive and wealth-producing capacities, or the U.S. and the global economies could sink to no return.
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Anything else is an exercise in futility.