Tuesday, June 02, 2009

Will the Obama Administration Address Trade Issues?

This is the question that keeps coming back today, the issue that has really dropped off the radar since the election. It pops up around the edges; Congressman Schauer posted a diary on it here back in March, and Governor Granholm hits on it today in a new HuffPo piece...

It is old news that with globalization, U.S. manufacturers move production to low-wage countries. But when it comes to manufacturing green products, it's time to change direction on offshoring. And here's why: in short order, the U.S. will have enacted a national commitment to reduce greenhouse gas emissions and end our dependence on foreign oil. This new energy policy will have defined a critical national need for the U.S. to become energy independent.

My point is this: we can't become energy independent by becoming dependent on energy products made by other countries. We either have the means to control our energy future, or we have to rely upon products made elsewhere to do it. Great nations do not relinquish their ability to make the products that will lift them to greatness. This is the moment for our nation to make green products here and export them, rather than the other way around.

We talk about setting up a new economy producing solar, wind, and advanced batteries, but it has been said many times, we will never be the cheapest place to do business as long as this trade imbalance remains. We don't have to go all Pat Buchanan crazy here and build walls of protectionism, and we shouldn't join the Mackinac Center's desire for a race to the bottom where American workers are paid the cheapest possible wage. There is a balance to be struck somewhere in there. We need to level the playing field. Jesse Jackson also made that point today -

If we force workers to renegotiate labor agreements, we must also renegotiate trade agreements. There is a tremendous imbalance in the formula. We've globalized capital, without globalized rules, without globalizing worker's rights, environmental rights, women and children's rights.

For too long, the US has let multinational companies and banks define our trade policies. So now we import $41.5 billion in cars and light trucks from Japan. But we sell just $534 million in Japan. South Korea sells $7.5 billion in cars and trucks in the US., but the US exports only $373 million worth of cars to those two countries. They sell 700,000 cars in the U.S., we sell just 5000 US cars in Korea.

We want and demand two-way trade, not one-way trade. We want and demand trade that is not just free, but fair, reciprocal and of mutual benefit. We want economic competition where all nations compete on a level, even playing field.

It seems pointless to set up a new manufacturing economy just to see that outsourced eventually as well. And as the governor mentioned, it's in our best national interest to control our own means of energy production. We saw what the high oil prices did to us last year, it doesn't make any sense to go down that road again.

Let's hope that our elected officials start to raise this question more often, instead of just dancing around the edges all the time. It needs to be addressed if we are to be successful in this new "green economy".