Other nations not playing by trade rules

Filed under: Opinion |

Dear Editor:

In answer to Mike Boyd’s editorial on the trade deficit on May 13, present trade relations with China and others is distorted by many factors.&#160 Among these:

&#1601.&#160 They fail to float their Yuan (yen) per World Trade Organization rules.

2.&#160 They subsidize manufacturing while in the U.S. we tax production.&#160 Subsidies are not allowed under WTO rules.

3.&#160 When they were granted permanent “Most Favored Nation” status, they were to follow WTO rules. They don’t.

4.&#160 They are exempt from Countervailing Duty (CVD) laws.

&#160People think in terms of the past when speaking about trade.&#160 Until recently, U.S. corporations competed with foreign corporations.&#160 Today, large U.S. corporations are fleeing the U.S. labor force and the small businesses that made up their supply chain for cheap labor in foreign countries.&#160 This has never happened at this pace,&#160so old modes of thinking may not apply.&#160

We have large manufacturers using foreign labor to avoid the costs of U.S. labor imposed by U.S. government regulations and high labor costs driven up by unions and minimum wage laws. All this so consumers can obtain U.S. prices at Chinese costs, essentially on credit, like a young, naive child with a first credit card.&#160 How short sighted can we get?

Bottom line: Who is responsible for creating this imbalance?&#160 Who is going to suffer?&#160 What happens to our middle class?&#160 What happens to our&#160political structure&#160as we approach Third World status?&#160

We are importing cheap labor and exporting high paying jobs.&#160 China and India are importing high paying jobs.&#160 Who is going to win that race?&#160 Who is going to buy products when the middle class works at McDonald’s?&#160 What will the value of the dollar be when this reaches equilibrium?&#160 What is our standard of living going to look like? &#160 If you take these scenarios to their logical extreme, it looks pretty scary unless we change course.&#160 And we suffer all of this because we don’t have the nerve to stand up to China and insist they play by the rules.&#160&#160Are we afraid to confront them because they hold so much debt?&#160Will we confront them now or wait for war?

Frank Shannon

Colorado Springs