Obama’s Trade Enforcement Unit is Not Enough
During last month’s State of the Union address, President Obama announced plans to create a Trade Enforcement Unit that would oversee America’s trading relationships. This unit was necessitated by the actions of countries like China, who have been able to flagrantly violate the terms of their agreements with the U.S. and, consequently, have gained huge advantages, putting American companies out of business in the process. Some critics have attempted to cast this move in a negative light, calling it protectionism. The reality is that the enforcement of our current trade laws is a step in the right direction, but it is far from enough to ensure the safety of American jobs.
Despite his previous timid approach to our trade problem with China, President Obama struck a different tone during the State of the Union. He talked up his administration’s record of bringing cases against China’s trade violations twice as often as the Bush administration that preceded him. This Trade Enforcement Unit should increase that number even further, but while it will enforce the terms of our current trade agreements it cannot make up for the inherent flaws in those agreements.
Attempting to stop offenses such as currency manipulation and illegal subsidization of industries may make a dent in America’s losses, but it does not offset the inherent discrepancies created by our free trade agreements. China will have much cheaper labor than the United States for the foreseeable future, and these low labor costs combined with lower environmental and safety standards make China attractive to companies. These are areas in which the United States cannot compete, because the American citizenry does not want to regress in order to compete with China.
Other agreements have imbalances written within them: the recently passed South Korean free trade agreement (KORUS) allows the United States to export only 75,000 cars per year to South Korea, while South Korean automakers can export an unlimited number of cars to the United States. Enforcement of our trade laws cannot correct the fact that our agreements are written by lobbyists for the benefit of a small number of individuals.
The new Trade Enforcement Unit is far from the protectionism its critics contend it is, but it is also far from enough to fix America’s trade problems. Until we get leaders who recognize that imports flooding our country are the root cause of our economic problems, American businesses will continue to suffer.