Yesterday, the Financial Times quoted John McCain as warning that a Clinton or Obama administration would mean “more federal regulation, more government control of the economy, and more government spending.”  He also worried that a Democratic administration would follow the wrong path on trade policy by, as the Times put it, “exploiting public resentment of foreign trade rather than focusing on how to make the U.S. more competitive.”

According to the Financial Times, McCain did acknowledge that “more must be done to help people who lost jobs because of globalization” and that he “promised more rigorous enforcement of trade agreements to protect U.S. interests.”

But in such points we begin to see some of the hypocrisy of Sen. McCain’s overall position on trade.

If indeed Sen. McCain favored rigorous enforcement of trade agreements, he would no doubt start by addressing culprit number one—the regime in China that brazenly flaunts world trade law for its own gain.  When entering the WTO in December 2001, China foreswore the very lucrative (and illegal) practice of currency manipulation.  And yet Beijing continues to undervalue its currency by as much as 40%.  Unfortunately, John McCain is one of a handful of Senators who has steadfastly refused to take action on the currency issue.

Wantonly violating world trade law for one’s own gain is a clearly protectionist act.  Or, conversely, it is a rather egregious swipe at free trade.  And so it’s hard to see how Sen. McCain can favor open markets while simultaneously supporting Beijing’s one-sided policies.

But that’s not the only contradiction in the McCain bag.  There’s a strange irony in Sen. McCain warning about Democratic imprudence with money while pursuing exactly the policies that have led to a $711 billion trade deficit in 2007.  More than a third of that shortfall, $256 billion, comes just from a mushrooming bilateral deficit with China.

U.S. manufacturers are put at a consistent disadvantage when countries like China utilize dumping, subsidies, and currency manipulation to undercut them.  The most unfortunate result is 3.5 million lost U.S. manufacturing jobs since 2000.  No doubt these displaced workers are feeling the pinch in their wallets, and McCain’s talk of low taxes will be of relatively little comfort until they again find good-paying jobs.

Far better would be for Sen. McCain to adopt a long-range plan that encompasses modernization of American manufacturing while addressing the cheating of countries like China that is displacing U.S. workers in the first place.

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This entry was posted on Tuesday, May 20th, 2008 at 11:08 pm and is filed under Manufacturing in the U.S., Holding China Accountable, Enforcing Trade Laws. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.