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Romney's position against China's intellectual property theft resonates at Microsoft
Howard Richman, 10/14/2011

China freely allows piracy of American CDs, DVDs and software. Potential Republican presidential candidate Governor Mitt Romney says he will do something about it. As a result, he got a "warm reception" at Microsoft. A Reuters' story states:

Romney received a warm reception from the audience of about 300 Microsoft employees. The world's largest software maker is especially interested in intellectual property issues, having lost billions of dollars in Chinese sales over the years due to piracy.

Unfortunately, what Romney says he would do about it would be ineffective:

"On day one of my administration I would designate China as a currency manipulator," Romney told to Microsoft Corp employees, in some of his toughest language yet against China.

"I would apply countervailing duties on Chinese goods where they have stolen intellectual property or where their currency manipulation is killing American businesses and jobs unfairly," he said at the software giant's headquarters in Redmond, Washington, near Seattle.

Is he going to place countervailing duties on Chinese goods because the office of the company producing the goods has stolen software on its computers? How is the countervailing suit filed in Washington by an industry group going to determine that? Romney's solution wouldn't work. You can't tackle intellectual property theft on a case-by-case basis through court suits filed in Washington.

The obvious solution would be for the United States to demand balanced trade. Currently China only buys about a quarter from the United States of what we buy from them. If we imposed a WTO-legal scaled tariff on Chinese goods, then the the Chinese government would itself crack down on its people's rampant theft of American intellectual property. They would have to do so in order to lower our tariff rate on their products.

Romney's message on China resonates with the American people who are tired of President Obama's giving away American prosperity to China. Governor Romney will make this a key campaign issue. Unfortunately, he has not yet figured out the solution.

When she was considering a run for president, Governor Palin said that she would seek balanced trade arrangments with America's trading partners. Why don't any of the other Republican candidates have this sort of common sense?

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Comment by M, 10/15/2011:

This story represents how corporate interests receive more attention, and are more important than the concerns of any individual.  (I would like to see) But, I fail to see an organized and informed public demanding that their jobs be protected.  Romney isn't likely to do anything to rock the boat.  He may talk big, but a look at his political legacy reveals that it's just not his style.

The problem of mercantilism has been addressed by the previous (4) Presidents viz-a-viz modest attempts to persude our trading partners to play fair. (And how well has that worked out?)  Whomever is elected, they will do as the others have done before them, until going backwards is no longer an option.

George Carlin thought it was a joke, I.E. the public caring about the political process and the politicians who threw them overboard (30) years ago?


Response to this comment by J, 10/17/2011:
M, I share your doubts about (1) Romney's sincerity concerning his trade position, and (2) whether he would be willing to do anything big enough to make a difference on trade.  However, with McCotter out of the race, Romney does seem to have the best position on trade.  Obama has been almost entirely ineffective.  Most of the other candidates seem to lack even Romney's chamber-of-commerce focussed attention to and understanding of the issue.  J

Comment by bob the american, 12/15/2011:

Also consider how we issue visas to chinese at whopping numbers, educate them, train them in offices/business, then they return back to china and transmit that sxperience to build up their economic machine.

Romney should limit visas with descretion.

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  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]