Trade Negotator says "Sorry, I messed up" PDF Print E-mail
Written by Stumo   
Tuesday, 10 June 2008

From the horses mouth, via a new blog on economics and trade, on June 4, 2008.

Writing today in Foreign Policy in Focus, Robert Cassidy, Assistant U.S. Trade Representative for Asia and for China for the Clinton administration, takes himself to task for the trade agreement with China that he negotiated. Here is how he begins:

As the principal negotiator for the landmark market access agreement that led to China’s accession to the World Trade Organization (WTO), I have reflected on whether the agreements we negotiated really lived up to our expectations. A sober reflection has led me to conclude that those trade agreements did not.
We failed to address the underlying fundamental market distortions that skew the benefits toward the few while leaving the rest of the economy less well off. As George Soros, in a Bloomberg News interview on the financial crisis, recently said, “…the system, as it currently operates, is built on false premises.” The premise on which our trade agreements are negotiated is at best flawed, if not broken.
And here is a key paragraph in which he explains why the trade agreement with China failed:

Using China as an example once again, proponents of the free trade model argue that China has a competitive advantage in wage rates that makes it ideal as the global manufacturing center that it has become. A closer examination, however, reveals that China has adopted an export-led development strategy, the centerpiece of which is a currency that is undervalued by 20-80%, with the consensus leaning toward 40%. Thus China’s wages, in U.S. dollar terms, are 40% cheaper than they would have been if the currency were allowed to freely float. Similarly, foreign investors receive a 40% subsidy to develop operations in China. To add insult to injury, our exports are taxed at an additional effective 40% rate....  

Here is the original piece by Cassidy. 

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January 9, 2008
 
WASHINGTON, DC – The U.S. Bureau of Labor Statistics (BLS) reported today that the United States lost 524,000 jobs in December.  From December 2007 to December 2008, U.S. nonfarm employment has fallen from 138,078,000 to 135,489,000, a loss of 2.589 million jobs.
 
U.S. manufacturing employment fell by 149,000 jobs in December.  In the last eight years, from December 2000 to December 2008, U.S. manufacturing employment has fallen from 17.178 million to 12.981 million, a loss of 4.197 million good middle-class jobs.  U.S. manufacturing employment now is at its lowest level since January 1942 – 67 years ago.
 

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