An interesting piece from the Financial Times last week:

China heads for top of manufacturing league
By Peter Marsh

China will take over the role as the world’s largest manufacturer from the US by 2020, but the US’s position in the global league table of manufacturers will remain surprisingly strong, according to Global Insight, a Washington-based economics consultancy.

Its forecast that the US will keep its share of global manufacturing output above 20 per cent, at least until 2024, goes against the widespread feeling, at least in the US, that the country is losing ground rapidly.

The US share of global manufacturing output will fall to 22.2 per cent by 2020 from 25.5 per cent last year. By 2020, China’s share will rise to 22.4 per cent, from 12.1 per cent in 2006.

 ManufactureThis wants to know what you think.  Is America #1 in manufacturing?  Where will we be in 2020?

Well, from pretty much all directions, the reviews are in and this week’s U.S.-China Strategic Economic Dialogue had disappointing results. As ManufactureThis predicted earlier this week, it was a polite exchange, a few pre-arranged agreements were touted and the real problems in the U.S.-China trade relationship, at best, were mentioned, but not addressed.

The Washington Post

What may be most disconcerting about this week’s talks is that Chinese delegation leader Vice Premier Wu Yi proclaimed the meeting “a complete success.” For China, maybe it was. This largest-ever Chinese delegation to the U.S. came, saw and talked; and now has left without conceding, or even in most cases acknowledging, the underlying problems of the predatory trading practices China continues to allow – dumping, subsidies, currency manipulation, an unwillingness to enforce basic workplace regulations.

Here in the U.S., some experts are advising “tread lightly” with China and predict a trade war may be eminent. However, as MT has discussed before, China needs the U.S. market, and China’s current trade practices, which are based on broken promises of free trade it agreed to in 2001 when it entered the WTO, risk hurting its country and its economy too.

MT certainly understands the delicacy of international negotiations. But the American workers and producers who stand to lose the most deserve more than “chit-chat diplomacy” and a “polite exchange” when it comes to China. They deserve progress and results, and we saw neither this week.

ManufactureThis was thrilled to have Senator Sherrod Brown (D-OH), Rep. Phil English (R-PA), Rep. Dave Loebsack (D-IA) and Rep. Betty Sutton (D-OH), as well as congressional staff from many offices join us on Tuesday evening for our Capitol Hill launch of “Enforcing the Rules,” AAM’s new DVD and book that argue for strengthening and deploying our trade laws. 

Rep. Betty Sutton (D-OH) addresses AAM’s Capitol Hill event. 

Greg Mastel, one of the study’s co-authors, introduced the DVD.   Everyone agreed on the importance of our trade laws and the economic benefits they bring to communities across our nation. 

The study explains in understandable terms why our trade laws are so important.  And the DVD, in under 11 minutes, puts a human face on the issue. 

If you would like a copy of the DVD, book, or both, write us at info@aamfg.org.  We look forward to hearing from you.

If you didn’t catch AAM’s Scott Paul on CNBC’s “Closing Bell” yesterday here is a little of what he had to say during a “roundtable” discussion that included China scholar Robert Kuhn:

“It’s very disappointing that the talks didn’t deal with any of the underlying structural problems of our trade relationship with China….We’re talking here about the agreements that China made to gain access to the U.S. market when it entered the WTO. It said it would stop subsidizing its industries, stop dumping its products, and appropriately regulate its industries. It’s broken virtually all of those promises.”

“We argue that if you actually counter China on its unfair trade practices, it’s going to respond and we’ll have a level playing field for our workers….We have trade rules on the books for a reason, to ensure our workers and producers have the same opportunities as their competitors overseas.” (click here for the full discussion)

Scott wasn’t the only one dissappointed. Much of today’s news coverage of the U.S.-China points out that Congressional leaders also feel there was a lack of progress.

In his CNBC appearance, Scott also pointed out the findings of the study AAM released this week - Enforcing the Rules - which found that the economic gains of enforcing trade laws outweigh by more than 50 times any so-called benefit from artificially low priced imports into the U.S.

The economic gains of enforcing U.S. trade laws outweigh by more than 50 times any so-called benefits of allowing artificially low priced goods into the U.S. market, according to a new study released today by the Alliance for American Manufacturing.

“Enforcing the Rules” is a first-of-its-kind look at the consequences of predatory trade practices, like dumping and subsideies, on workers, manufacturers and their communities, and emphasizes the economic benefit of enforcing U.S. trade laws.

A companion video produced by AAM goes on location with workers in the shrimp, steel and furniture industries to hear first hand the damage caused when our trading partners are allowed to break the rules.

Check out Scott Paul’s op-ed on this week’s U.S.-China Strategic Economic Dialogue in The Huffington Post.

Syndicated columnists Steve and Cokie Roberts this weekend attempted to marginalize criticism of the recent trade agreement brokered by the White House and Congressional leaders by implying opposition to the proposal came primarily from the Labor community. Steve and Cokie in essence say Labor has its “head-in-the-sand view” when it comes to trade and is ignoring the benefits of trade:

“Add another point that labor leaders never mention: their members, like all American consumers, can buy more goods more cheaply, from sweaters to softballs, when they are made abroad.”

ManufactureThis wants Americans to have “cheap sweaters and softballs” too. But only if those products are not the result of subsidies intended to undercut U.S. producers. Furthermore, Steve and Cokie shouldn’t be surprised that neither Labor leaders nor any Americans would be very interested in giving a free ride to those who break the rules.

Americans — rural, suburban, Republican and Democrat, Labor activist and investor — are concerned about the inattention that American policymakers give to predatory trade tactics by many of our trading partners. Subsidies, currency manipulation, piracy and other barriers prevent Americans from having the benefits of free and open trade and yet they have to pay the price for the cheating of others.

Here’s a question that Steve and Cokie don’t address: Why go through the trouble of negotiating new agreements if we’re not going to enforce the rules on the existing ones? In fact, according to an AAM study out this week, when we do enforce our trade laws to combat predatory trade practices, the economic gains for Americans are substantial.

Steve and Cokie also suggest that the “losers” in free trade must accept their fate:

“But there are losers as well as winners, and any free trader must also support better education, smarter midcareer training and more generous benefits for workers who do lose their jobs to international competition.”

This conclusion leaves out a step. While welcoming international competition, ManufactureThis like most Americans, insists that those small businesses, employees, and American investors whose opportunities are uprooted because of predatory trading practices should not simply be dismissed as “losers.”  

Americans should have access to softballs and sweaters at the most economical price — and many of them also believe that before they endorse any new trade agreements, American policymakers should insist that the terms of the earlier agreements are adhered to.

The proposed agreement needs a thoughtful and thorough discussion, not one where those who raise questions or concerns are shut out or dismissed.

As you know, ManufactureThis has been urging the 2008 presidential candidates – both Democrats and Republicans – to tell Americans how they plan to address the challenges facing American manufacturing. Yesterday, several Democratic officeholders in Michigan, including the state’s two U.S. senators and governor, also joined the chorus, calling on their party’s candidates to step up to the plate and discuss plans to strengthen manufacturing.

The second U.S.-China Strategic Economic Dialogue gets underway nets week. Already, forces supporting the status quo are making their case for more of the same. Chinese Vice Premier Wu Yi penned an editorial, “It’s a Win-Win on U.S.-China Trade” in the WSJ today warning against stronger enforcement of trade laws. Regrettablly, she cites evidence that only tells half the story.

ManufactureThis thinks the U.S. $235 billion trade deficit with China is unacceptable. We believe China should abide by all the commitments it made in 2001 when it joined the WTO and was granted additional access to U.S. markets. Those commitments include ending many types of subsidies, opening China’s domestic market to more U.S. goods and following the rules of trade that prohibit below-cost dumping into our market.

What do you thin? More of the same, or insist that China honor the commitments it made?

From yesterday’s Washington Times — High Price of Shoddy Goods

“U.S. Customs and Border Protection reported in 2002 that counterfeit goods brought into this country in one year cost American businesses an estimated $200 billion in revenue and the loss of some 750,000 jobs.”

“Counterfeit products include baby food, toys, automobile and aircraft parts……pacemakers and software, among many others.”

“Automobile brakes made of compressed grass and wood have shown up in American stores, and other counterfeit auto parts look so good that even trained mechanics can’t tell they are fake.”

“According to Loss Prevention Concepts Ltd., a Michigan consulting and intelligence-gathering organization, fraudulent parts have caused deaths from airline and auto accidents.”