Tue, Feb 07, 2017 - Page 8 News List

The benefits of Trump’s bilateral ‘fair’ trade

By Jason Yeh 葉家興

On the third day of the Lunar New Year, while Chinese communities worldwide were still in a festive mood, the US International Trade Commission ruled that anti-dumping duties of 32.12 percent to 52.51 percent would be levied on large washing machines imported from China.

This is the fourth time this year that the US has imposed anti-dumping or anti-subsidy sanctions on Chinese imports. This once again casts a shadow over the uncertainty of economic relations between China and the US following US President Donald Trump’s inauguration.

This is not a new issue, nor is the scale and trade amount of the involved industries very large.

China’s Trade Remedy and Investigation Bureau responded with its usual rhetoric, calling the ruling “seriously questionable.”

However, all three trade officials nominated by Trump are hardliners. In congressional hearings, US Secretary of Commerce Wilbur Ross accused China of being the most protectionist nation in the world.

White House National Trade Council Director Peter Navarro has published three books criticizing China for engaging in unfair trading practices, and US Trade Representative nominee Robert Lighthizer has made similar criticisms. Does this mean that friction between the US and China will become more intense?

There are reasons to be more optimistic. Pure trade protectionism or isolationism is detrimental to the US, which is something Trump, as a businessman, must be well aware of. He wants to withdraw from multilateral trade agreements, such as the Trans-Pacific Partnership, and replace them with renegotiated bilateral trade agreements in the belief that it will help the “no longer so great” US to reach better trade terms. This view is not necessarily wrong.

Over the past two decades of globalization, capital has been moving unregulated from place to place.

The beneficiaries have been large European and US enterprises and the middle classes of emerging nations, while the middle classes of developed countries, especially the US, have remained in the doldrums. Big US companies are making record profits just as the stock market is reaching record highs, while many in the middle class have lost good jobs and joined the ranks of those in the lowest-paid service sector. In Trump’s eyes, this free trade at the expense of the public must be replaced by bilateral “fair” trade.

Trump can ignore the stars in Hollywood and on Broadway, the opponents in the US Democratic Party and even dissent in the US Republican Party, but as a political novice, his power comes from grassroots supporters and a frustrated middle class and he must therefore strive for better terms of trade for their sake.

Perhaps economic and trade data are too trivial, but Trump voters, who self-deprecatingly call themselves “pathetic” and ridicule failed Democratic US presidential candidate Hillary Rodham Clinton, are indeed supported by statistics: The latest data show that average life expectancy in the US has decreased. In the US — a biotechnology leader with advanced medical technology, at an ordinary time without epidemics or natural disasters — American lives are being cut short.

As the world’s first and second-largest economies, there are lots of possibilities of exchange between the US and China in areas such as agriculture, education, healthcare, aviation and infrastructure construction. Trump should understand that to improve the situation promoting mutually beneficial fair trade with China is more valuable than uncontrolled, runaway free trade. Let us wait for the confrontation and negotiations between the two.

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