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US protectionism balks free trade momentum
2003-09-19
China Daily
The United States' misleading outcry against China's trade policies does not serve the interests of either country and adds to global worries about rising protectionism in the wake of the failure to reach any agreement at the Cancun talks.
The Bush administration announced the creation on Monday of a task team to investigate unfair trade practices by its trade partners.
The decision was made after some US Congress members' complaints about trade with China. US lawmakers from industrial states are even pushing for legislation that would threaten China with higher tariffs if the country refuses to let its currency, the renminbi, float at market rates.
Following a series of futile efforts to press for a rise in the renminbi, Washington has outdone others in the international chorus of criticism by blatantly blaming its domestic problems on China.
However, making China the scapegoat can perhaps help some US politicians score cheap political points, it has nothing to do with the solution of their real problems.
It is true that China is running record surpluses with the United States. But China's overall balance of trade is only slightly positive as it currently runs huge deficits with other countries. The fact indicates that the ball might be in the US court.
To lay their finger on imports from China for their loss of 2.7 million manufacturing jobs over the past three years in the US is also far-fetched.
Nonetheless, such arguments only expose their lack of a firm grasp of bilateral trade between the two countries as well as a faith in economic globalization.
The United States' trade deficit with China accounted only for about 1 per cent of its gross domestic product, too small to affect the US economy in any decisive way.
As the largest developing economy and the largest developed economy respectively, China and the United States do have a lot common interest in expanding bilateral trade and investment to facilitate each country's industrial restructuring.
During the course of economic globalization, every country has to face its own challenges. Finger-pointing can only mask, but not address, problems.
The accusation made by the US about China's currency policy does not hold water as China has chosen a "no revaluation" stance after a careful overall review of its own and the global economic situations. China's soaring exports were largely fuelled by drastic trade reforms, dynamic private and foreign-funded enterprises and an abundance of cheap and skilled labour, instead of an undervalued currency.
So indefensible was the US claim that China has been slow to fulfil its promises on opening markets. The accelerating inflow of overseas capital which made China the largest destination for foreign direct investment last year bears full testimony to how fast China's trade and investment environment has been improved.
The high-pitched but groundless US objections to China's trade policies do not bear scrutiny and US policy-makers should not be led to make anything at the cost of trade and investment opportunities for both countries.
As the Cancun talks just dealt a heavy blow to the world economy, any protectionist act is definitely what the international community would least want to see.
The US attempt to increase trade protectionism will shatter hopes of agreeing a freer and fairer trade accord by the end of 2004 to give developing nations bigger benefits from trade, and also delay the global economic recovery.
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