Guest Article: Politcs: USA & China: John Kosumi's proposal for a new US Policy on China
I want to thank the group of Congressmen, reported to include Reps. Bernie Sanders (I-VT), Walter Jones (R-NC), Peter DeFazio (D-OR), and Pete Visclosky, (D-IN), for introducing a measure in Congress to remove China's PNTR* trade status designation. The move, on Feb. 9, came two weeks after Shengde Lian and I called for the removal of PNTR, in a joint op-ed released Jan. 27. Lian is a Tiananmen Square student leader, and Executive Director of the Free China Movement, while I am the founder and Director emeritus of the China Support Network--Americans boosting Chinese democracy since 1989--the year of Tiananmen's massacre.
*PNTR = Preferred Nation Trade Rating - Owlb
I also want to thank and praise Senator Chuck Schumer (D-NY) and his colleagues for their action in the Senate to apply a tariff to Chinese goods, intended to compensate for currency manipulation, an unfair trade practice on the part of China.
Efforts to get tough with China are breaking out all over, at least in the US. (We regret that Europe is backsliding, moving to lift the EU arms embargo against China -- a move that swims against the "get tough" current. The Free China Movement and CSN have also opposed that move in action elsewhere.) It is refreshing that U.S. leaders, on a bipartisan basis, are coming 'round to alarm about China, if belatedly to those of us who have long sounded the alarm about China.
Congressmen and the Free China Movement arrive at this issue from different angles; Congressmen are driven here by the matter of jobs in their districts, the economic ill effects of China trade (outsourcing, trade deficits, and more), and with an interest to fix the U.S. economy. The Free China Movement is here with the intent to secure freedom, democracy, and human rights for its homeland -- liberation and regime change are the objectives it seeks. The reasons to be here are different for the respective groups, but the latter concerns actually comport with the Bush doctrine, which seems to add a seamlessness to the situation.
The China Support Network and I have long advocated a prohibitive "tyranny tariff," and I have stood my ground on saying that "free trade is for the free world." Global free trade is flawed in two respects. It encourages trade deficits, and it is tantamount to a vast largess of "welfare for tyrants." I believe that all free world nations should tariff all tyranny nations with which they run trade deficits -- and conversely, they should not tariff if they are running a surplus with, e.g., China.
The preceding paragraph is a simple, clear-cut vision that would add teeth to the Bush doctrine. However, it need not happen all at once. In fact, at this time I want to break the action into baby steps, and suggest that we should move through them incrementally, in a step-wise manner. For example, removal of PNTR is one step, and a tariff is another step, and not all tariffs are created equal. There are three possible justifications for a tariff on Chinese goods, and tariffs may exist in two sizes: compensatory, and prohibitive.
The first step, of removing PNTR, is long overdue. PNTR violated the Clinton campaign promise of trade (MFN* renewal) linked to progress on human rights in China. The Free China Movement still wants the original Clinton campaign promise. That vision was appealing in its day, and dissidents appeared in support of Clinton at the 1992 Democratic National Convention. Removal of PNTR is the first step, welcomed by freedom lovers.
*MFN = Most Favoured Nation status
A tariff is another beast, likely welcomed by U.S. workers who have been 'outsourced' and seen their jobs move to China. To move in this direction represents an actual fix to the U.S. economy. If the real worry is jobs, trade deficits, outsourcing, and the like, then the second step of a tariff becomes necessary. Let's consider the three justifications to tariff Chinese goods.
Currency manipulation is economic dirty pool. Senator Schumer has picked up on this and suggested a 27.5% compensatory tariff.
Slave labor is economic dirty pool. Somebody ought to pick up on this and suggest another compensatory tariff that would be additive with the first mentioned rate. Note that, as House members announced their action to revoke PNTR, the suggestion was floated of a 45% tariff.
Global free trade is flawed. Somebody ought to pick up on this, object to welfare for tyrants, and suggest a prohibitive tyranny tariff. (CSN might suggest 450%.)
The China debate is where everyone can pick their favorite justification(s) and tariff rate. However, my article suggests a gradual approach, because the choice does not exist in a vacuum. If we simply went for the smaller, compensatory tariffs, then we would be handing China tariffs with reasons attached. These could be effective to fix unfair trade practices within the WTO* model. The WTO model is ultimately flawed (and ultimately, I stand with the anti-globalization cause), but we could delay its demise and keep it on the table for some period of time.
*WTO = World Trade Organization - Owlb
Why keep a flawed model? Because there is peace in the Taiwan Strait. A full outbreak of Cold War with China could also lead to an outbreak of Hot War over Taiwan. Right now, the WTO model may be keeping the peace, because China has something to lose in the event that it crosses the Taiwan Strait. In Beijing, the entire removal of America trade could change the calculus about war and peace.
For now, let's leave Beijing with "something to lose" in any contemplated move against Taiwan. This is why I call for gradualism, and an incremental, step-wise approach in lowering the boom and "getting tough" with China. The Free China Movement has no objection to MFN renewal, with human rights conditions attached. (This was the Clinton promise that was never delivered.) And, no one can object to specifically focused and targeted compensatory tariffs that relate to unfair trade practices -- intended to level the playing field, in the face of economic dirty pool. Senator Schumer has a virtuous, upright, and honorable proposal, as do the House members on PNTR. The China Support Network will offer to be helpful and to assist in any way with securing the passage of these measures.
John Kusumi, former teenage candidate for U.S. President, served as Director emeritus of the China Support Network (CSN) until March 10, 2005. This article was originally written February 19, 2005. It was held for public release while China debate has been building up to a head. It is more timely being released now, on May 23, 2005.
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