One part of Mitt Romney’s “Jobs Plan” is worth pointing out and commending: he is right when it comes to China. Romney calls for steps to make China “play be the rules” including sanctions for currency manipulation and blocking China’s use of third-party countries to evade enforcement. Romney is right that just enforcing existing rules will bring back jobs.
The Romney Jobs Plan (promoted here on FOX News, and also promoted here on FOX News, and also promoted here on FOX News. and also promoted here on FOX News, and also promoted here on FOX News) gets one thing right, and that is how we should approach China. Even if he only got it right because his polling shows huge, huge public support for this position on China, it’s right. And right is right.
Romney says that on his first day as president he will label China as a currency manipulator and assess tariffs on Chinese imports if China doesn’t let its currency move to market rates.
A Sign Of Elite Opinion Changing?
So here we are, a leading contender for the Republican Party nomination for President has joined with the position of America’s manufacturers, when only 80%-or-so of the public supports it. Romney’s position echoes Donald Trump’s position on China and trade when he was in the race. It shows the beginnings of a change in elite understanding on China. Romney is breaking with what has been the Tom-Friedmanist, bipartisan, elite consensus that anything labelled “free trade” is good no matter what the costs to our country. It shows an understanding that these agreements as implemented and (un)enforced are just draining all of our money and capacity to make a living as a country.
Romney being Romney the reason he got it right is probably because it polls overwhelmingly well. But he is mouthing good, poll-tested language and hopefully this will lead to more from others. The fact that even Romney, representative of the Eastern investment-house elite, feels this is advantageous politically acknowledges the strength of this position and shows how it is gaining intellectual credence. This puts pressure on Obama and Democrats to take action, and pass a bill to force the administration’s hand on currency manipulation, and proceed from there.
Specifics On China In Romney’s Plan
From the summary of the Romney Jobs Plan:
An Order to Sanction China for Unfair Trade Practices
• Directs the Department of the Treasury to list China as a currency manipulator in its biannual report and directs the Department of Commerce to assess countervailing duties on Chinese imports if China does not quickly move to float its currency.
From the full document: (excerpt only, go read the rest.)
Dropping Our Guard
President Obama has also singularly failed in handling commercial relations with China. He came into office with high hopes that displays of American goodwill toward Beijing would lead to better relations across all fronts. Predictably, the goodwill has not been reciprocated; China is driven by its own interests, not by appeals to its sentimentality. Having tried and failed with “engagement,” the Obama administration now behaves as if the United States has no leverage in dealing with a country that routinely steals our designs, patents, brands, knowhow, and technology—collectively, our “intellectual property.” Entirely fake Apple Stores operate openly in Chinese cities. It is hard to be more brazen than that.
This is not all happenstance. Rather, it is the result of a deliberate policy by the Chinese government that seeks to build up its economy by piggybacking on Western technological success. On many occasions, Chinese companies have simply reverse-engineered American products, with no regard for the patents and other protections of intellectual property rights that are crucial to our own economic well-being. The Chinese government facilitates this behavior by forcing American companies to share proprietary technology as a condition of their doing business in China. A recent study by the U.S. Chamber of Commerce reports that international technology companies consider these practice to be “a blueprint for technology theft on a scale that the world has never seen before.”
China’s unfair trade practices extend to the country’s manipulation of its currency to reduce the price of its products relative to those of competing nations such as ours. While the extent and impact of the manipulation is widely debated, the practice provides an invisible subsidy to Chinese goods sold internationally and an invisible tariff on other nations attempting to sell in China. Despite making gestures to the contrary, China’s government often excludes foreign goods from consideration for its government purchases. And it uses a variety of unfair practices—for instance, inventing regulations and standards that only Chinese companies can meet, and artificially lowering costs for Chinese companies—to tilt the playing field in its favor. Instead of responding forcefully, the Obama administration has acted like a supplicant. Having borrowed hundreds of billions of dollars from Beijing to pay for its agenda, it has placed America in a weak position at the very moment when we need to stand tall.
But Will He Support An Actual Solution?
Romney says he supports confronting China over their currency manipulation. So, will he support the Currency Reform for Fair Trade Act (S. 328 & H.R. 639), which would boost America’s ability to hold China accountable for its currency manipulation? Or is it all just talk?
Harold Meyerson writes about Romney’s China plans at American Prospect,
But two [of Romney’s plan points] are interesting.
One of them is a proposal Romney promises to implement by executive order on his first day as president: Label China as a currency manipulator and assess tariffs on Chinese imports if China doesn’t float its currency. This is an idea that unions and the liberal wing of the Democratic Party have been urging on the Obama administration since it took office. Indeed, when the Democrats controlled the House, they passed a bill that would have required President Obama to move in this direction, though it died in the Wall-Street-friendly confines of the Senate. …
… The other Romney suggestion of note also runs counter to free-trade ideology. Romney proposes to establish a “Reagan economic zone” that would offer fewer trade restrictions to nations that offer greater protections for intellectual property, something that China clearly doesn’t do. In essence, alongside the WTO, it would create a smaller, more privileged group that’s more solicitous of American companies’ economic interests.
Romney’s idea provides the kernel for what should be the Democratic response: By all means, let’s set up a smaller group of nations with which we can trade more freely, but don’t limit the criteria for joining to respect for intellectual property. Since globalization has clearly dragged down American wages and incomes, let’s also limit membership to those nations that have serious minimum-wage statutes and enforcement, and freely permit their citizens to form unions. China and most other authoritarian regimes would be excluded for violating every one of these conditions, and by adding these additional criteria, Romney’s proposal would benefit not just American corporations but American workers as well. [emphasis added]
The Rest Of The Plan — Not So Good
Aside from China, here are the main elements of the Romney plan:
- Cut the corporate income tax. (Because we all know corporations don’t have enough money yet.)
- More free trade agreements. (Because our trade deficit isn’t high enough yet.)
- Open up more and more oil drilling. (Because we all know that oil is clean and good.)
- Job retraining. (For all those empty job openings.)
- Immediate 5% cut in government spending except military. (Because the people who brought you “tax cuts increase revenues” think taking money out of the economy puts money into the economy.)
- Get rid of health care reform. (Because it is modeled after Romney’s own Massachusetts plan?)
- Cut and eliminate regulations. (Wall Street and Deepwater Horizon taught how that works out.)
- Make it hard or impossible to unionize, and fight existing unions. (Because we really don’t need working people having the ability to ask for raises and benefits.)