AAM regional coordinator Mickey Bolt has been on the ground in Ohio throughout the week, meeting with various Clinton and Obama staffers to discuss AAM’s “China Cheats” campaign.  And, as both campaigns have been stepping up their pace with last-minute campaigning before Tuesday’s primary, Mickey summed up their shared rhetoric as “Who hates NAFTA more.”

Mickey has been talking with various Steelworkers and local businessmen, and they all recognize that NAFTA has cost Ohio many thousands of good-paying manufacturing jobs.  But NAFTA is a 14-year-old trade deal, and Mickey has been hearing from Ohioans that they are deeply frustrated with the Bush administration’s lack of effort in tackling illegal, subsidized competition from China.  Cheap, subsidized Chinese steel, for example, has taken a toll on a number of Ohio steel mills and machine shops.

AAM has been making the point in its “China Cheats” campaign that the current presidential candidates need to state for the record what they’ll do with regard to China.  Will they strongly enforce existing U.S. trade law, and take action against illegal currency manipulation?  Or will they sit on their hands and allow China to continue running roughshod over U.S producers?

Getting answers from the presidential candidates was a key theme in AAM’s recent spate of Town Halls.  Hosted by actor John Ratzenberger, the “Keep it Made in America” events spotlighted the urgency of saving U.S. manufacturing jobs.

With Ohio’s worried populism taking center stage in the political debate right now, something about AAM’s “bringing-it-to-the-people” Town Halls has begun to resonate in Washington.  And nothing could better signal AAM’s bellwether status than yesterday’s article in The Politico, which featured interviews with both John Ratzenberger and AAM director Scott Paul.

The Town Halls, which Scott Paul described as a “cathartic experience” for many displaced workers and concerned voters, have helped to shape the primary season debate.  The Politico noted: “During the second meeting, held in mid-October in Des Moines, Iowa, manufacturing issues with China and its trade agreements were discussed in depth. And Paul said the discussion translated into a dramatic increase in the level of activity surrounding the issue in the fall, culminating in a large presence at the National Public Radio debates in early December.”

AAM is taking the same approach state-wide in Ohio, trying to make sure that a convenient fixation on NAFTA does not preclude debate on the very real problem of China.  With Beijing grabbing a $256 billion trade surplus from the U.S. in 2007, there’s more at stake than just one bad trade deal.
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Well, Hillary Clinton and Barack Obama had at it again Tuesday night at a debate in snowy Cleveland, picking away at healthcare and Iraq.  And as per their current, Ohio-centric rhetoric, they danced around their previously mixed statements on NAFTA.  Both agreed, however, that the trade deal should be “renegotiated.”

A funny thing, though: with both candidates so committed to saving American jobs, they somehow missed the big elephant in the room: China.  The country that racked up a $256 billion trade surplus with the U.S. in 2007 was mentioned only once, in passing, during the entire debate.  No matter that Ohio has been demolished by factory job losses, and that “China Cheats” in world trade by using such illegal practices as dumping, subsidies, and currency manipulation.  No—Hillary and Obama worried away the time with thoughts on labor and environmental provisions for foreign workers.

  A recent study by EPI found that Ohio lost more than 66,000 jobs between 2001-2006 just because of the U.S. trade deficit with China.  Ohio also has lost the 3rd largest number of manufacturing jobs of any state in the U.S.—more than 242,200 lost in the past seven years alone (roughly 1/4th of all Ohio factory jobs).  Only California and Michigan have seen more factory jobs lost in that time. 

In the bigger picture, the U.S. has lost more than 3.3 million good-paying manufacturing jobs since 2000, and more than 40,000 factories have closed in the past 10 years.  EPI’s report noted that America’s lopsided trade deficit with China cost the U.S. 1.8 million jobs from 2001-2006.

The end result of all of this is more unsafe imports from China and a greater dependence on foreign factories to produce both our every day consumer goods and military hardware. 

Regarding China: Since Tim Russert won’t do it, it’s up to Ohioans to say, “Before you get my vote, I want to know how you’ll stop China’s cheating.”

Voters want presidential candidates who will stand up for American manufacturing and emphatically state that they will hold China accountable.  Anything else is just prattle.

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EXCERPT: Statement of Senator John McCain on HR 4613, Fiscal Year 2005 Defense Appropriations Act Conference Report

  “This year’s conference report also includes a number of “Buy America” provisions. For example, it prevents the foreign purchase of welded shipboard anchor and mooring chain four inches in diameter and under. Another provision ensures that all carbon, alloy or steel plates are produced in the United States. Whew. I know we’ll sleep better at night knowing that all of our carbon plates are manufactured in the U.S. Yet another section prohibits the Department of Defense from purchasing supercomputers from a foreign source.

“Mr. President, I continue to be very concerned about the potential impact on readiness of our restrictive trade policies with our allies. Every year, Buy America restrictions cost the Department of Defense and the American taxpayers over $5.5 billion. From a philosophical point of view, I oppose these types of protectionist policies, and from an economic point of view they are ludicrous. Free trade is both an important element in improving relations among nations and essential to economic growth. From a practical standpoint, “Buy America” restrictions could seriously impair our ability to compete freely in international markets and also could result in the loss of existing business from long-standing trade partners. Not to mention that procurement policy determined in the Defense Authorization Bill, not in the Appropriations Bill.”

Here’s a troubling article in today’s Huffington Post– a British jet that crashed, possibly as a result of shoddy Chinese jet fuel.

USA Today asked a great question yesterday—which ManufactureThis will paraphrase here: Since the three leading contenders for president have less executive grounding than anyone elected to the White House in nearly a half-century, and not one has run a small business or large corporation, do they know how to help America’s businesses?

Or, more accurately, do they understand what’s involved in U.S. manufacturing? 

Of late, Hillary Clinton and Barack Obama have been slugging it out in Ohio over NAFTA.  The Washington Post notes an Obama indictment of NAFTA “for the loss of 1 million jobs since 1994,” with Obama pointing a finger at Clinton for supporting the agreement: “in 2004, she said, ‘I think, on balance, NAFTA has been good for New York state and America.’”

Clinton has fired back, saying that the Obama campaign had “unfairly quoted her as saying that NAFTA had been a ‘boon’ for America.”  She also noted that it was President George H.W. Bush who actually “negotiated” NAFTA, not her husband.  Clinton supporters also take umbrage with Obama’s lack of a voting record on recent free trade agreements.

While it’s nice that both candidates are suddenly recognizing the fall-out from NAFTA, which has dramatically boosted U.S. trade deficits with both Mexico and China, and has cost the U.S. hundreds of thousands of manufacturing jobs, it’s important to see the bigger picture.  Of great concern are China’s illegal trade practices, which have “demolished” manufacturing states like Ohio.  Simply put, “China cheats,” and ManufactureThis would like both Clinton and Obama to say as much.

Possibly this is where lack of business experience comes in.  At AAM’s Town Hall meeting in Chicago last week, Douglas Bartlett, owner of the Illinois printed circuit board company Bartlett Manufacturing, discussed his firsthand experience with China’s illegal currency manipulation.  While printed circuit boards remain a crucial dual-use item for both computing needs and military hardware, U.S. suppliers have seen their market share dwindle from $11 billion annually to $4.5 billion.  As Bartlett pointed out, his firm can compete with any manufacturer worldwide, but only when the rules of the game are fair, and not illegally stacked against him.

The business of America is business, as Calvin Coolidge once said.  It would be nice if America’s presidential candidates stood up clearly for domestic manufacturing and explained how they’ll tackle China’s cheating.  Business is not a game.
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AAM’s Town Hall meeting in Chicago last Wednesday night was well attended.  It prompted an insightful article by Steve Franklin in today’s Chicago Tribune.

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With the Democratic candidates trading barbed remarks about health care and economic prescriptions last night, ManufactureThis notes that the March 4 Ohio primary comes at a time of heavy manufacturing job losses throughout the industrial Midwest.  A Bloomberg News article this morning cited AAM data on the more than 235,000 manufacturing jobs lost in Ohio alone since 2000.

  Again and again voters are saying: Fix the Economy, Save our Jobs.  Nowhere was this more evident than at AAM’s Town Hall meeting in Chicago Wednesday night, hosted by John Ratzenberger.  As Medill News noted: “Candidates are saying a lot about the economy during this election season, but the Alliance for American Manufacturing doesn’t think they are saying enough.” 

The NWI Times summarized the Town Hall with: “Although more than one speaker at the event admitted that globalization was here to stay, arguments were made by business owners, employees and politicians that manufacturing jobs need to stay within U.S. borders to stay competitive, prevent further unemployment and maintain the property tax base in manufacturing areas.”

Once again, “It’s about the economy.”  As such, the U.S. would be well served by strengthening U.S. manufacturing and retaining good-paying manufacturing jobs.  ManufactureThis wants to hear presidential candidates saying this, too.

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AAM’s Scott Paul published a letter to the editor in the Feb. 19 New York Times to debunk some of the statements made byeconomist Robert Reich.  ManufactureThis reprints Scott’s letter here:

____________________________________
February 19, 2008
LETTERS

As the Wheels of the Economy Turn

To the Editor:

Robert B. Reich may be correct in noting that we’re “sliding into recession, or worse,” but his suggested fixes don’t add up.
Mr. Reich notes the importance of giving “middle- and lower-income Americans more buying power.” While that’s helpful, Mr. Reich then decries “trade protection” because “most routine jobs are being automated anyway.”

In fact, manufacturing jobs pay extremely well and create other well-paying jobs through a multiplier effect. Furthermore, manufacturing jobs are not “automated,” and instead require the training to operate high-tech computerized machinery.
Manufacturing workers are paid well precisely because of these skills. What’s needed is to create good-paying jobs, and one avenue is to strengthen American manufacturing.

We should enforce existing United States trade law to tackle the illegal, protectionist tactics of countries like China, which use currency manipulation in violation of world trade law to undercut honest American manufacturers.

Scott Paul
Director, Alliance, for American Manufacturing
Washington, Feb. 13, 2008
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Despite the loss of 3.3 million good-paying manufacturing jobs since 2000, John McCain believes the U.S. is still on the right course to ensure economic prosperity.  As his website makes clear, “globalization is an opportunity for American workers today and in the future. Ninety-five percent of the world’s customers lie outside our borders and we need to be at the table when the rules for access to those markets are written.”

Now, ManufactureThis is non-partisan.  Or, more accurately, we seem to dislike everyone in equal measure.  But McCain, who comes from the party of Lincoln, Teddy Roosevelt, and Calvin Coolidge, seems to have long since turned his back on the nation’s domestic manufacturers, and thus comes in for special criticism.

  McCain’s championing of what he refers to as “globalization,” as noted above, seems hopelessly naïve.  Yes, 95% of the world’s consumers live outside our borders.  But unfortunately, they hold very little of the world’s wealth.  Consequently, they are not actually “customers” for U.S. goods, but low-wage laborers who knit the shirts and shoes sold at Wal-Mart.

The rest of the world isn’t necessarily thrilled by the United States’ position as the number one affluent consumer, though.  And that may explain why, despite McCain’s ideal of being “at the table,” the faceless World Trade Organization (WTO) almost always rules against U.S. interests. 

McCain’s website notes his desire to “reduce barriers to trade, level the global playing field and build effective enforcement of global trading rules.”  It’s a nice goal, but one he’s never really sought to act on.

Since 1994, China has artificially devalued its currency in order to boost exports.  After joining the WTO in 2001, Beijing promised to halt this illegal “currency manipulation.”  Unfortunately, it has yet to do so.  If Senator McCain really believed in reducing trade barriers, he would press Chinese leaders to live up to their commitments by halting currency rigging.  Unfortunately, he voted against the Schumer-Graham bill intended to address China’s currency peg.

And then we get to Senator McCain’s pledge to aid “displaced workers” by “retraining, relocating and assisting them.”  One might ask if a supposed free market Republican wouldn’t prefer a system wherein workers can find their own jobs in a healthy manufacturing sector rather than depend on federal aid.

But ideology aside, McCain simply misperceives the value of manufacturing.  There’s his recent campaign slip about “some jobs that aren’t coming back to Michigan.”  And then there’s his very revealing comment during the 2000 primary campaign, when McCain told the worried parent of a recently laid-off mill worker, “Forgive me for wanting more for your son.” 

First world economies depend on manufacturing to create wealth.  Senator McCain may approve of a paper mill worker downshifting to some mythically rewarding service job, but the bigger point is that there are paper mill jobs in the United States paying $70,000 per year.  Hourly wages in retail, by contrast, do not boost families into the Middle Class.

And so we see McCain’s circular logic.  He supports unfettered free trade, even if it means the dismantling of entire industrial sectors.  The federal government can always spend endless dollars to retrain these workers.  And if the succeeding jobs don’t pay well, there’s always more federal money to spend, spend, spend on more assistance.  No matter, though, because in McCain’s America we can always purchase the cheapest possible goods from overseas.

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Annual figures for the 2007 U.S. trade deficit in goods and services were released today by the Commerce Department—to little public fanfare.  But the hundreds of billions of dollars in net foreign purchasing by U.S. consumers last year will have heavy repercussions.

  Thanks to a slowing economy and weakening dollar, the overall trade deficit fell somewhat from 2006’s record $758 billion.  But the $711 billion deficit racked up in 2007 represents “many thousands of U.S. factories closed and workers laid-off,” according to AAM Deputy Director Horace Cooper. 

The trade deficit set escalating records over the past five years and, as Cooper further noted, the “more than 3.3 million good paying manufacturing jobs we’ve lost since 2000 suggest that huge, ongoing trade deficits do not make for a more prosperous America.”

Of particular note, more than half of the roughly $500 billion U.S. trade deficit in goods in 2007 is with China.  The U.S. clocked a record $256 billion trade deficit with China, which, as Cooper emphasized, underscores the “need for legislation addressing both illegal currency manipulation and unsafe imports.”

Moreover, the cumulative U.S. trade deficit with China in manufactured goods has reached $1.1 trillion since Beijing joined the World Trade Organization (WTO) in December 2001. 

Some will point to a 6% reduction in the annual trade deficit as encouraging news.  Unfortunately, similar declines have been noted when the U.S. tips into recession.  From 1990 to 1991, the annual trade deficit fell from $111 billion to $76 billion.  And in 2001, the deficit fell to $429 billion from a previous record of $454 billion.

These drop-offs tell us that, in tight times, the U.S. economy finds it even harder to sustain its pattern of overconsumption and net borrowing from the rest of the world.

It remains to be seen how the U.S. will fare during a new recession that seems all but inevitable.  Continuing to allow good-paying manufacturing jobs to travel overseas, however, is not a recipe for success.

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