In a March 27 editorial, the Washington Post’s David Ignatius suggested that Pennsylvania move beyond its manufacturing roots and embrace a bright future of new tech jobs.  Of course the so-called ‘new hi-tech jobs’ in PA that he sees as better than manufacturing jobs can easily be off-shored by the same trade policies that have seen manufacturing move overseas. 

AAM’s Scott Paul wrote a pointed rebuttal, which ran in today’s Washington Post.  It read as follows:

David Ignatius [” ‘Roboburgh’ Rising,” op-ed, March 27] fell into the “either/or” trap when he tried to describe the challenges facing manufacturing and Pennsylvania’s economy.

The fact is, you can’t build “new” economy jobs without a strong manufacturing base. The steel industry has consolidated and modernized.

Today you’ll find more steelworkers operating computers and lasers than working with ingots. The steel industry’s challenges come in the form of illegally subsidized competition from countries such as China, indifference on the part of Beltway pundits such as Mr. Ignatius, and inaction on Capitol Hill and at the White House. Manufacturing is still the largest contributor to Pennsylvania’s economy, which may come as a surprise to Mr. Ignatius.

Each manufacturing job supports four or five other jobs in Pennsylvania communities.  And manufacturing is responsible for two-thirds of private-sector research and development all over America.

It is possible to build a bridge to the 21st century but not without a strong manufacturing base and not without countering foreign trade practices that distort the market and harm American workers and businesses. Sens. Barack Obama, Hillary Rodham Clinton and John McCain would be wise to address these issues and ignore Mr. Ignatius’s outdated stereotypes.

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    AAM’s Scott Paul was quoted in today’s Buffalo News, making the point that if candidates want to credibly claim they’re the candidate who’s supporting domestic manufacturing, they need to make a “strong statement on China.”

Let’s see what the candidates say.

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  Global Erie’ Peter Panepento wrote a great piece yesterday on the “impact of illegal Chinese trade practices” on Pennsylvania jobs.  And very revealing were just how many Pennsylvanians left comments on his blog.  A cursory review of those responses shows that the great majority agreed with Mr. Panepento’s (and AAM’s) view that the U.S. must enforce its trade laws and address China’s cheating.

With more than 207,400 Pennsylvania factory jobs shipped overseas since 2000, you can bet that the Keystone State recognizes there’s a problem. 

Across the state, from Allentown TV to the Pittsburgh Post Gazette, AAM’s latest report on China clearly resonated.  China’s illegal trade practices (including dumping, subsidies, and currency manipulation) are costing the state more than 15,000 jobs per year.

It’s high time for the candidates to state that they’ll enforce U.S. trade laws and take strong action to strengthen American manufacturing.  Pennsylvania has lost more than 78,000 jobs to China since 2001 and voters want to hear what the candidates will do about it.

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  An interesting item in yesterday’s Chicago Tribune: Reporter Jim Tankersley noted that some progressives are skeptical about Clinton and Obama promises to correct NAFTA’s shortcomings.

Tankersley cites Senator Bernie Sanders in his article.  Sanders observes that if the candidates were genuinely concerned about the failings of current U.S. trade policy, they’d be addressing problems with China as well: “It doesn’t take a PhD in economics to see when you go shopping the only products you can afford are made in China.  The American people know it, and I hope our candidates learn it.”

AAM’s Scott Paul was also quoted in the article, noting that increasing voter concern regarding lost manufacturing jobs will lead to “a stark difference” in the general election.  Paul also focused particular criticism on John McCain, whom he said “has made it clear that he is philosophically disinclined to do anything on this issue.”

Bottom line: U.S. trade policy needs an overhaul.  Convenient fixations on NAFTA overlook a more grievous problem.  Our $256 billion annual trade deficit with China outstrips our NAFTA trade deficit by more than $100 billion.  China cheats on trade agreements and illegally manipulates its currency, all in an effort to gain an advantage over its competitors—including the U.S.

The coming weeks will provide a revealing indication of whether ANY of the candidates would actually take serious action to address China’s cheating. 

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15,640 Pennsylvania jobs lost per year as a result of China’s illegal trade practices

WASHINGTON, DC, MARCH 25, 2008—A new analysis by the Alliance for American Manufacturing (AAM) found that the U.S. trade deficit with China has taken a surprising toll on Pennsylvania workers.  Annual job losses in Pennsylvania due to trade with China average three times higher than losses discussed by some of the presidential candidates and attributed to NAFTA.

“In just a few short years, tens of thousands of Pennsylvania jobs have been shipped to China,” said AAM Director Scott Paul.  “The presidential candidates are rightly concerned about the potentially damaging effects of unfair trade and they need to focus more attention on our record trade deficits with China, which have cost us more than 1.8 million jobs since 2001.  Vigorous enforcement of our trade laws will ensure American workers and companies have the chance to compete in a fair global market.  We call on the presidential candidates to make this commitment to the voters of Pennsylvania.”

AAM’s analysis of Economic Policy Institute data found that Pennsylvania lost 78,200 jobs from 2001-2006 (all sectors) as a result of the U.S. trade deficit with China [source: EPI, ‘Costly Trade with China’].  That works out to an average of 15,640 lost jobs per year.   Using an identical analysis, AAM found that Pennsylvania lost 44,173 jobs from 1993-2004 (all sectors) as a result of NAFTA, for an average of 4,016 jobs lost per year [source: EPI, ‘Revisiting NAFTA’].

PENNSYLVANIA JOB LOSS
Due to CHINA            78,200             2001-2006
Due to NAFTA            44,173             1993-2004

“China cheats and Pennsylvania loses,” said Paul, noting that the U.S. racked up record annual trade deficits in 2007 with both China ($256 billion) and its NAFTA partners ($138 billion).  “If the presidential candidates want to save Pennsylvania jobs, they should commit to fighting China’s illegal trade practices such as dumping, subsidies, and currency manipulation.”

AAM advocates strong enforcement of existing U.S. trade law in order to address predatory foreign practices like China’s dumping, subsidies, and illegal currency manipulation.  An AAM study in 2007 found that when U.S. trade laws are actually enforced, the net contribution to the U.S. economy is 50 times greater than any consumer benefits derived from dumped or subsidized imports [source: ‘Enforcing the Rules’].

A state-by-state breakout of U.S. jobs lost to China is available here.

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  Some progressives are taking exception to John McCain’s recent support of Airbus in a tanker deal with the U.S. Air Force worth more than $30 billion.  You can see their tongue-in-cheek video here. Some critics have suggested that the loss of such a large contract for Chicago-based Boeing could cost a net 40,000 U.S. manufacturing jobs.

There are critics who consider McCain’s support for Airbus no surprise.  He has consistently opposed “Buy American” provisions in Capitol Hill legislation, calling them “ludicrous,” and sarcastically noting in 2004 that he would “sleep better at night knowing that all of our [Navy’s] carbon plates are manufactured in the U.S.”

Actually, we at ManufactureThis would sleep better at night knowing that.  Wouldn’t you?

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  Barack Obama was asked about U.S. manufacturing jobs yesterday by the Charlotte Observer and his response was suitably “McCain-esque.”  In a line reminiscent of McCain’s pithy “Those jobs aren’t coming back” line in Michigan, Obama started out with “Look, some of those jobs are just not coming back.”  He then asked a rhetorical question: “How do we make sure more jobs don’t leave?”

Here’s an excerpt from the transcript:

     Q: North Carolina has lost thousands of manufacturing jobs. What would you say to people trapped in a changing economy?
     Obama: Look, some of those jobs are just not coming back. So the question is, No. 1, how do we make sure more jobs don’t leave? And that means setting up trade agreements where you actually got labor standards and environmental standards and safety standards that are enforceable, so that U.S. workers can compete on an even playing field.

ManufactureThis would like to very simply and succinctly answer Senator Obama’s question: In order to retain U.S. manufacturing jobs and grow new ones, the United States must begin to enforce its trade laws.  The U.S. has trade laws on the books for a reason, and they need to be vigorously enforced in order to address dumping, subsidies, and currency manipulation by countries like China that cheat on trade agreements in violation of world trade law.  Remedying unfair competition is the most immediate and tangible way to create an “even playing field.”

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  It isn’t enough that the Chinese government manipulates its currency and dumps its products in the U.S.

It isn’t enough that China sends us unsafe and toxic food, consumer products, and medicine.

  And it isn’t enough that China’s air pollution, which may disrupt the 2008 Olympics, already accounts for 25% of California’s smog.

No, China has now decided that it can trample on the rights of its citizens—in this case Tibetans—to speak freely and preserve their culture.

ManufactureThis has a simple question: How does U.S. trade policy—and Washington’s inaction on these matters—contribute to all of this?

  The answer is simple.  China can fund its oppression from the spoils of a $256 billion annual trade surplus with the United States.  That $256 billion happens to account for more than one-third of the entire annual U.S. trade deficit—and is by far the largest bilateral deficit in history.

That’s a big gravy train to ride and Beijing has little incentive to cease-and-desist from its illegal currency manipulation and other deliberate market distortions.  So what if these practices contribute to millions of lost jobs in the U.S.? 

Children are taught to look both ways when crossing the street.  And much of common sense stems from keeping one’s eyes open—looking both ways.  But ManufactureThis is still waiting for the current crop of presidential candidates to put all of this together—to say, “Wait a minute, something’s wrong here…”

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  Congressman Rahm Emanuel (D-IL) published an op-ed in today’s Wall Street Journal that offered “a plan that helps address Americans’ economic anxieties and prepares workers for the future.”  High among the suggested items were “training and education” for “the next generation of workers.”

Interestingly, Emanuel, who was one of the chief Clinton administration advisers on NAFTA, admitted that the trade deal “hasn’t lived up to its hopes.”  Unfortunately, the Congressman didn’t bring the same insight to his assessment of the overall job picture.

It’s ironic that Emanuel would call for more worker training and education when the major problem of the day is job flight– U.S. factories moving overseas.  Simply put, it’s hard to motivate young Americans to train for jobs that they believe will be outsourced.

But logic aside, Emanuel seems to make the same great, glaring error as the rest of the U.S. Congress– namely, he completely overlooks China.  In fact, a search of his bright new ”New Deal” reveals that the word “China” is never once mentioned.

One could term this a gross misjudgement.  China is the country responsible, year after year, for a record, bilateral U.S. trade deficit that reached $256 billion in 2007.  It’s also the country that, in violation of world trade law, continues to dump products, subsidize its industries, and illegally manipulate its currency.  An EPI report found that the U.S. trade deficit with China cost the U.S. 1.8 million jobs from 2001-2006.

If Rep. Emanuel wants to rebuild U.S. jobs, his talk about expanding U.S. healthcare, and increasing the national savings rate, would suggest that he’s digging in the wrong place.  First and foremost, Americans want to be able to hold onto their jobs before they ponder such seeming luxuries as comprehensive medical insurance and a bigger savings account.

A prudent starting point would be for Congress and the Administration to begin enforcing existing U.S. trade law to ensure that U.S. workers and businesses can compete fairly in the global marketplace.  Anything else is wishful thinking.

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 It’s interesting to see how editors and economists slice up the latest economic data.  Today’s Chicago Tribune offers a “Pennsylvania Primer” on NAFTA that misrepresents some of the concerns Americans have about lost U.S. manufacturing. 

The problems with NAFTA boil down to jobs—namely, the loss of many good-paying middle class jobs.  According to the Tribune’s editorial, the CATO Institute’s Dan Ikenson considers an annual loss of 100,000 factory jobs to be acceptable.  Ironically, the recent manufacturing job toll is far greater, and one wonders if the 58,000 factory jobs lost in January alone might worry them.

And while the Tribune trumpets a 58% increase in U.S. factory output over the past 13 years, it’s equally important to consider that the U.S. trade deficit jumped more than tenfold in the same time. 

The real question is why the rest of the world isn’t buying U.S. products.  If they were, the U.S. trade deficit wouldn’t vastly outstrip increased domestic productivity. 

A more accurate Pennsylvania primer might be the state’s 207,400 manufacturing jobs lost since 2000, many of them due to illegal competition from countries like China that cheat on trade agreements.

The Chicago Tribune can praise NAFTA all it wants, but it needs to be consistent.  Espousing free trade should mean rebuking China for the protectionism it practices, not just rejection criticism of NAFTA.

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