Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
China uses industrial policy is to keep out US products
Alan Tonelsen of American Economic Alert pairs a revealing set of quotes in a May 10 blog posting (Obama Administration's China Trade Brain-Locke):
The Washington Post had a good article about China's industrial policy on May 7 (China's industrial policy is bigger concern than yuan, U.S. executives say). Here's a selection:
Despite the fact that the Chinese economy grew by 8.7% last year without increasing its imports one iota from us, the Obama administration thinks that just talk is a good way to increase American exports to China.
In truth, the best way to change China's policy of excluding American exports to China is to start tying Chinese exports to the United States to China's imports from the United States. The United States could use either Import Certificates or tariffs to do so.
Either action would be completely in accordance with a special WTO rule for trade deficit countries (Article 12 of the Uruguay agreement), as I pointed out in a recent commentary (How Import Certificates Could Balance Trade and Budget). which drew heavily from a December 2009 EPI working paper by international law experts from the Offices of Stewart and Stewart (Addressing Balance of Payments Difficulties Under World Trade Organization Rules).
When the Obama administration chooses not to invoke Article 12, even though President Nixon did so in 1971, they are choosing to give away America's future manufacturing and research and development jobs to China.
Journal of Economic Literature:
Atlantic Economic Journal: