By John Stang
In order to prove that he is tough on foreign policy, Mitt Romney published an op-ed outlining his plan to stop China’s egregious trading practices. First he outlines the problems:
China is a case in point. Having embraced free enterprise to some degree, the Chinese government and Chinese companies have quickly divined the benefits of ignoring the rules followed by others. China seeks advantage through systematic exploitation of other economies. It misappropriates intellectual property by coercing “technology transfers” as a condition of market access; enables theft of intellectual property, including patents, designs and know-how; hacks into foreign commercial and government computers; favors and subsidizes domestic producers over foreign competitors; and manipulates its currencyto artificially reduce the price of its goods and services abroad.
Then he lays out his plan of action. First:
If I am fortunate enough to be elected president, I will work to fundamentally alter our economic relationship with China. As I describe in my economic plan, I will begin on Day One by designating China as the currency manipulator it is.
Ohhh, scary! Actually, the Treasury Department has avoided doing this, but it amounts to when the U.N. Security Council condemns an action, it means little . President Obama has also acknowledged this problem, but will probably not influence China to do anything about it. Second:
More important, I will take a holistic approach to addressing all of China’s abuses. That includes unilateral actions such as increased enforcement of U.S. trade laws, punitive measures targeting products and industries that rely on misappropriations of our intellectual property, reciprocity in government procurement, and countervailing duties against currency manipulation. It also includes multilateral actions to block technology transfers into China and to create a trading bloc open only for nations genuinely committed to free trade.
I doubt this will work. Even when sanctions are placed on countries like Iran, oil companies still find ways to trade with that country. With so many companies relying on China for labor there is not a chance in hell a bill like that would ever pass. Even if it did, you can guarantee they would get around it. Also, creating a free trade zone is hard. Congress just passed 3 free trade bills in Congress that had been lagging for more than 5 years. More importantly, I can’t think of any country that would go along with this plan. The EU certainly won’t, most Latin American countries won’t, Asia is out, and Africa is cozying up to China now. Even getting a hardline bill through the House with a Republican majority did not work. Oddly enough, the Democratic senate did pass the initiative.
Is currency manipulation by China dangerous? Yes. Do intellectual property violations hurt business in the Yes? Definitely. Does everyone recognize this problem? Of course. The reason no one confronts it head on is simple: businesses like the cheap labor and China’s rising status as a superpower. Romney might talk a big game, but this plan is hardly realistic.
