February 14, 2008

Fair Trade Really Is Unequal Trade

I don't have much of a problem with Fair Trade agreements, but they must be followed by both sides.

Much of the problem with fair trade agreements is that the U.S. follows them but the other side doesn't. China is a huge one that refuses to follow the rules.

In the sweeping decision, the three-member WTO panel found against China on nearly every point of contention with the United States, the 27-nation EU and Canada. The panel found that Chinese measures "accord imported auto parts less favorable treatment than like domestic auto parts" or "subject imported auto parts to an internal charge in excess of that applied to like domestic auto parts."

China is protecting it's own industries, a concept that the U.S. needs to learn.

The three trade powers argued that the tariff was discouraging automakers from using imported car parts for the vehicles they assemble in China. As a result, car parts companies had an incentive to shift production to China, costing Americans, Canadians and Europeans their jobs, they said.(emphasis mine)

Oops, did someone just say that unfair trade practices were costly U.S. workers their jobs?

China, which will still be able to appeal, claims the tariffs are intended to stop whole cars being imported in large chunks, allowing companies to avoid the higher tariff rates for finished cars. It argues that all measures are fully consistent with WTO rules and do not discriminate against foreign auto parts.

Yet there has never been a case where a U.S. manufacturer is chopping cars up and sending them in as parts. That would be very costely just to get around a tariff.

It's about time someone is calling China to the carpet, lets hope that things actually change.

Posted by Quality Weenie at February 14, 2008 08:51 AM | TrackBack