How Tough is “Tough on China”?

Editor’s Note: This article will also be featured by EconomyinCrisis.org

Republican campaign surrogates have defended misleading television and radio ads, as well as an equally misleading stump speech, put out by the Romney campaign attacking President Obama for his handling of the auto bailout and the removal of American auto jobs to China. Most Romney apologists claim that the former Massachusetts Governor was actually demanding that Chrysler ought be building cars for the Chinese market in American factories.

Unfortunately, while that talking point might be ideal it does not reflect reality. China imposes import duties and tariffs on high-end manufactured imports. If Chrysler hopes to sell in China it must build in China per Chinese law.

China is a member of the World Trade Organization and is the recipient of a strong Permanent Normalized Trade Relations (PNTR) agreement with the United States. Even if American automakers wanted to take China to court for refusing American-made imports, the established legal framework internationally and in Washington stands in the way.

Mitt Romney’s Solution: “Be Tough”

The Chinese auto market is the second largest in the world. It is in Chrysler’s best interests to build cars in China to sell in China. It then sells cars in the United States to sell domestically.

Obviously, Mitt Romney ought to use these facts as his campaign talking points. Why has he not done so?

The reason Mitt Romney has not specified a means to take down the favorable legal framework granted to Beijing by Washington is that his chief economic and foreign policy advisor was an architect of that framework.

Ohio Senator Rob Portman (R) will likely receive a nomination to be the United States Secretary of State should Mitt Romney win the election on November 6. During his time as a United States Representative for Ohio he was a fierce advocate of free trade, deregulation, and policies favorable to outsourcing.

As a US Representative Mr. Portman voted in favor of presidential “fast track” authority on free trade, he supported NAFTA and the WTO and was a vocal proponent of the US-China PNTR in the House Republican caucus. He voted several times against motions to repeal the PNTR as well as legislation to withdraw the United States from the WTO and NAFTA.

As the United States Trade Representative during the Bush administration Senator Portman took the lead on creating the framework for the free trade agreements with Colombia, Panama and South Korea, which were then finalized and signed by the Obama administration.

All of these mechanisms provide a guaranteed framework through which the United States loses money and jobs to free trade.

Mr. Romney’s private investments are heavily leveraged in support of outsourcing, particularly to China. Mr. Romney’s takeover firm, Bain Capital, just finalized the closure of a Sensata Technologies plant in Illinois.

Since joining the Romney campaign, Senator Portman has promised that his candidate would be tough on trade and tough on China. History indicates that both men are staunch supporters of unfettered free trade, deregulation, and maintaining status quo with Beijing.

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One thought on “How Tough is “Tough on China”?

  1. I’m not sure I understand this all correctly. How can you lose money to free trade? doesn’t it all come back in the end? And if it doesn’t, isn’t it good since it’s like buying something from someone using a check, but that check never get’s cashed? How are jobs lost? Wouldn’t jobs just be shifted around to a different, more efficient industry, since free trade raises the standard of living in a country by allowing it’s citizens to purchase things cheaper? so wouldn’t the same amount of money still be spent just on different things?

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