Continuing its trade deal agenda, the Bush administration is pushing new initiatives with various Central and South American countries, including Panama, Peru, and Colombia.  Regarding negotiations on a U.S.-Panama Free Trade Agreement, Commerce Secretary Carlos Gutierrez suggested yesterday that a Panama deal could help both countries gain an advantage over China.

AAM disagrees with this rationale, noting that the way for the U.S. to become more competitive is to invest in domestic American manufacturing and to demand that China follow the laws of international trade.

In a Bloomberg News article by Mark Drajem, AAM’s Scott Paul noted that extending trade agreements to Latin America isn’t an antidote to the problems of an unbalanced trading relationship with China:

“This is a recycled argument,” said Scott Paul, executive director of the Alliance for American Manufacturing, which represents steel producers and unions.  “Free-trade agreements are no panacea for the challenge American producers and manufacturers face from China, nor for Latin American producers as well.

“The way to deal with China is to hold them accountable for unfair trade practices, to demand that they play by the rules,” he said.
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Manufacturing has traditionally provided some of the best-paying jobs in the U.S. economy.  And where 14 million Americans are directly employed by manufacturing, another 8 million have found jobs via manufacturing’s “multiplier effect”—it’s interconnected linkage to the rest of the economy.  This phenomenon is clearly visible in many U.S. cities, where a large factory often drives the local economy.

So what happens when a large plant is put out of business by subsidized low-cost competition from a country like China ? 

Not only do the factory’s workers lose their jobs, but those people whose livelihoods depend upon the overall manufacturing economy also lose their jobs.  This ripple effect means less taxes paid into the local and state economy, less disposable income to buy goods at the local store, fewer people with health insurance, and an increased demand for social services at precisely the time when the tax base is shrinking.

In a troubling example of “What if…,” the Fayetteville Observer’s Andrew Barksdale has pondered the troubles that would plague North Carolina if the Goodyear Plant in Raleigh were forced to close its doors. 

While Goodyear’s annual payroll currently reaches $142 million, and the typical Goodyear factory worker earns $50,000 a year, Barksdale suggests that a shuttered Goodyear plant could mean thousands of displaced workers and the loss of up to $1 billion a year in overall economic activity.

If you don’t think manufacturing is important, think for a moment about whether your job could be affected by the loss of someone else’s factory job.
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A new report on workplace conditions in China finds that a factory making Disney toys routinely overworked its employees and exposed them to toxic conditions. 

The squalid conditions of the workplace, as well as the bathrooms and living areas, came in for particular scrutiny, with workers complaining about poor ventilation of fumes in paint spraying rooms.

The workers do not receive either pensions or insurance for workplace injuries and are fined for both refusal to work overtime or taking bathroom breaks that exceed five minutes. 

As reports of unsafe Chinese products continue to appear in the U.S. media, it’s important to note the unsafe conditions in which they’re made.  Substandard labor conditions help to produce inexpensive Chinese goods.

When you add up illegal practices like currency manipulation, and low-wage, high-risk labor, you begin to understand why China can manufacture Disney toys so cheaply. 

When Americans buy goods marked MADE IN CHINA they should be aware of exactly what they’re getting for their money.
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AAM’s Scott Paul discusses the link between outsourcing and tainted Chinese products in his latest piece for the Huffington Post.

There’s a reason why people are worried about defective and unsafe products from China.  They don’t want anyone in their family to get sick—whether it’s a child exposed to lead paint or a dog poisoned by tainted food.

Unfortunately, U.S. Trade Representative Sue Schwab thinks some of the solutions being proposed constitute “protectionism.” 

But trade philosophy shouldn’t undermine the safety of American children.  Proposals to increase inspections of imports and hold overseas manufacturers accountable are not protectionist.  We call them common sense. 

Practically speaking, these new policies won’t put much of a dent in our trade deficit with China.  But they will keep our kids safe.

The current situation is completely unacceptable: 
-The U.S. imported $288 billion worth of goods from China in 2006 and almost none of those products were inspected. 
-More than 80% of toy manufacturing takes place in China– and most frequently in penny-wage factories where corners are sometimes cut so that profits can go up (yet product safety goes down).

Is protecting lives protectionism?  You decide.
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AAM’s Horace Cooper has published an interesting piece on manufacturing in the latest issue of CAPACITY: 21st Century Manufacturing.  You can read his article online.

…And in other fun news, the U.S. economy actually lost 4,000 jobs in August 2007.  Typically, the economy will create some tens of thousands of jobs per month (68,000 in July, 69,000 in June, etc.)  But even those job gains have been revised downward, too, according to the Center for Economic and Policy Research’s latest analysis of government data. 

U.S. Bureau of Labor Standards data shows that trouble in the housing market is creeping outward to the rest of the economy.  Manufacturing and construction have both been particularly hard hit.

Manufacturing lost 46,000 jobs in August, a far greater number than in recent months.  In the past year alone, manufacturing has lost 215,000 jobs.

Each one of these lost jobs means a family whose budget will now be extremely tight, and whose health insurance may hang by a thread.

There is a ripple effect to job losses.  Lost wages mean lost purchasing power.  The loss of someone’s manufacturing job can affect your job.

AAM believes that American manufacturing must be strengthened now, while there’s still a manufacturing base to protect.  Enforcement of U.S. trade law is a sensible policy.

An interesting article by Alex Williams in yesterday’s New York Times notes that the “Buy American” movement is no longer a “blue collar” or “lunch-pail conservative” sentiment.

In fact, according to Williams, the notion of buying goods made in the U.S.A. has now come into vogue among self-described “yuppies” and “liberals.”  When AAM launched in April, we noted that manufacturing is indeed hip and cool.

Now, people are beginning to make the connection between lost jobs at home and MADE IN CHINA labels on their clothes and toys.

John Ratzenberger, host of The Travel Channel’s ‘Made in America,’ explains that “more people are looking around in their own towns, realizing once these companies close, it’s going to affect the fabric of their communities. Things they took for granted, like sponsors for Little League for example, aren’t there.”

AAM heartily agrees with this sentiment.  In fact, AAM’s ‘Enforcing the Rules’ study found that the benefits of keeping manufacturing in the U.S. (and the higher wages it provides) far outweigh the convenience of cheaper imports.  Simply put, good jobs provide far greater benefits to communities in terms of household buying power, taxable wages, and health care coverage.

Maybe the globalization cheerleading New York Times—the folks who have so heartily supported NAFTA and CAFTA—are finally taking a moment to look around their own communities and note the carnage that has resulted from more than a decade’s worth of outsourcing.

In Australia today, President Bush met with Chinese President Hu Jintao.  Among the topics discussed was the safety of Chinese products.  The issue is particularly timely because, just yesterday, the Consumer Product Safety Commission announced that Americans can expect more Chinese-made toys to be recalled in the coming months.  This comes on the heels of toy manufacturer Mattel’s recent, massive recall due to excessive lead paint in some of their products.  This is Mattel’s third product recall.

The lead paint toy warnings follow reports of other faulty consumer products made in China such as toothpaste and diabetes testing strips.

According to President Bush, the Chinese president was “quite articulate about product safety.”  Hu himself was quoted as saying that “the Chinese government has always taken the quality of Chinese products and the safety of Chinese food very seriously.”  Hu added that China has “enforced very strict inspection and examination procedures throughout the whole process of manufacturing Chinese products.”

Unfortunately, China is home to a lucrative counterfeit products industry.  While the USTR has noted that piracy and illegal manufacturing of counterfeit goods is “rampant” throughout the People’s Republic, Chinese officials have yet to make a serious dent in the outflow of bogus goods.  Beijing give assurances of cooperation, but the USTR still views the situation as being at “epidemic levels.”

One can only wonder, then, if Beijing has any real interest in cracking down on unsafe products.  Pirated goods are notoriously shoddy, and American consumers are often unaware that they are purchasing fake perfumes, golf clubs, and toys.

Just as U.S. trade law must be strongly enforced, U.S. concerns over products safety should prompt greater scrutiny of imported goods—especially from the massive manufacturing juggernaut of China.