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Understanding (Un)Fair Trade With China

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By Andrew Gussert, director of the Citizens Trade Campaign
Imagine you’re running a restaurant, and over time, working hard, you’ve made a name for yourself as one of the best. Business is good, until a large restaurant goes up next door, and you immediately start losing customers.

You soon find out why: They have several unfair advantages.

  • They hire young children to work in the backrooms, and you don’t. (You know kids should be in school.)
  • They dump grease and other chemicals directly into the community, while you pay for garbage to be disposed of properly, so others don’t get sick.
  • They don’t follow food health regulations, while you only use ingredients that pass basic inspection.
  • They don’t worry about worker safety laws, while you make sure things are up to code, so your employees won’t get hurt.
  • They use a dirtier utilities provider, and get cheaper energy, paying less for the electric bill.
  • When you both applied for liquor permits, they bribed the decision maker, while you followed the rules, which of course slowed you down.
  • They pay well under minimum wage, while you pay a living wage.
  • You find out they stole your best recipes, developed at your expense, and because of the items above, can make them cheaper. You are now forced to come up with new ones just to compete (which they may later steal).
  • And, as a last straw, you find every time a person swipes a debit card to pay, they get an automatic 40% discount, so the same dinner you offer for $12 only costs $7.20 from them.

This pretty much sums up our trade policy with China.

While our countries don’t sit right next to each other, our products on the shelves do.

All added up, this severe trade imbalance with China cost us an estimated 2.4 million jobs since 2001. Whether – listed in order – it’s their use of child labor, lax environmental laws, unhealthy food regulations, lack of workplace safety, low-cost dirty coal energy, rampant internal corruption, unfair low wages, intellectual property piracy, or currency manipulation, China has numerous unfair advantages that combine to tilt the playing field vertically.

Currency manipulation by the Chinese government has artificially made its goods cheaper and ours pricier. Most economists believe that China’s currency is undervalued by about 40 percent, which amount to a 40% tariff on our goods going to China, or a 40% subsidy on their goods coming here.

This month, we have the chance to do something about it.

Use this online tool to contact The Treasury Department and The White House and demand they name the Chinese government a “currency manipulator.”

Last Updated ( Thursday, 15 April 2010 08:22 )
 

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