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When the Coalition for a Prosperous America met with the Office of the U.S. Trade Representative a few weeks ago, we were told that increased enforcement of existing trade agreements was going to be a priority. We believe them, but actions mean more than words.
Now Ron Kirk has just announced a major enforcement action against China for export tariffs on raw materials which give manufacturers in that country an advantage.
The United States trade representative, Ron Kirk, said China had imposed quotas, export duties and other costs on raw materials used in the production of steel, chemicals and aluminum. In effect, he said, China was putting its thumb on the scale and giving Chinese manufacturers an unfair edge.
There are many existing laws that other countries do not comply with. The Bush administration refused to prosecute them, despite being requested to do so by many industries. The rules in trade agreements were treated with a wink and a nod.
He said that restrictions on exports of bauxite, zinc, yellow phosphorus and other raw goods make it more expensive for manufacturers to produce finished goods and threatened thousands of jobs in industries already rocked by the global recession.
Ron Kirk and Obama can make a decent-sized dent in the problem through enforcement. Indeed, the complaints may have already had some effect.
On Monday, in a possible effort to blunt the trade complaints, China announced that it would cut or eliminated export taxes on some metals, steel wire, fertilizer, soybeans and wheat.
That being said, CPA told the USTR representatives that, while we very much support increased enforcement, the U.S. can enforce to perfection and not solve the economic problem.
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