15-21 may 2017-min

8 15 - 21 May, 2017
Editorial
NEW DELHI TIMES
Trade Challenges: United States,
♦ By David Kilgour
Author & Lawyer
Canada and China
C
omplaining about Canadian
softwood-lumber and dairy products,
President Trump seems unaware that
Canada is currently the No. 1 market for 35
U.S. states. According to the U.S.
Department of Commerce, American
exports of goods and services to Canada
in 2015 supported an estimated 1.6 million
jobs at home.
In 2016, Canadians purchased nearly
US$322 billion (C$426 billion) in goods and
services from the United States. Services
exports from the US were US$54 billion;
the trade surplus on services was US$24.6
billion. The combined U.S. goods and
services trade surplus with Canada was
U.S.$12.5 billion.
No two nations depend more on each
other for their mutual prosperity and
security than the U.S. and Canada. Threequarters
of Canadian exports today go
south to America. Vehicles, crude oil and
auto parts comprised a third of our total
exports to the U.S. last year. Cars, light
trucks and auto parts exports sold for $79.8-
billion, with bitumen and crude oil bringing
$51.5-billion according to Canada
customs data. Other top export products
include lumber, natural gas, aluminum and
pharmaceutical/food products.
Some exports are essential to global supply
chains. The current North American auto
industry was built around NAFTA, with
manufacturers, suppliers and retailers
scattered across the continent. The
agreement allows auto parts to travel easily
around North America, with some crossing
the U.S., Canadian, and Mexican borders
several times before being assembled into
vehicles. Hasty changes to NAFTA could
slow production, increase costs and
ultimately make North American-made
vehicles less competitive with ones made
in Japan, Germany and South Korea.
The U.S. trade imbalance in goods and
services with China last year, however, was
US$3o9 billion, with Canada’s merchandise
trade deficit with China being C$44 billion.
Our two governments and others should
thus initiate zero tolerance on unfair trading
practices by Beijing, including currency
manipulation of the yuan, the sale of
consumer products made by forced labor,
theft of intellectual property and the
continued refusal to honour its
commitments made to the World Trade
Organization on joining it in 2001.
In contrast, Japan, India, South Korea and
the other rule-of-law democracies in Asia
should be favoured as trading partners in
the region until China respects the rules of
international commerce.
A major obstacle to a sustained world
economic recovery is China’s continued
swamping of export markets with its
manipulated currency, which amounts to
both an export subsidy and a tariff on
imports. China’s central bank has used
export revenues to buy trillions of dollars
in U.S. treasury bills, partly as a means of
keeping its own currency price down.
Peter Navarro, Director of the White House
Office of Trade and Manufacturing Policy,
has argued that consumer markets across
the world have been “conquered” by
China largely through cheating.
These include export subsidies,
widespread counterfeiting and piracy of
products, and safety standards so weakly
enforced that China is a hazardous place
to work.
The consequences for Americans, he
notes, included the eventual closing of
about 54,000 factories and outsourcing of
approximately 20 million related jobs mostly
to China.
For all countries trading with China,
Navarro has proposals to ensure that
commerce with China becomes fairer.
Specifically:
· refrain from illegal export subsidies and
abide by the rules of the World Trade
Organization (WTO);
· define currency manipulation as an illegal
export subsidy and add it to other
subsidies when calculating anti-dumping
and countervail penalties;
· respect intellectual property; adopt and
enforce health, safety and environmental
regulations consistent with international
norms;
· ban the use of forced labour and provide
decent wages and working conditions for
all;
· adopt “zero-tolerance” for anyone selling
or distributing pirated or counterfeit
goods;
· block defective and contaminated food
and drugs by measures which make it
easier to hold importers liable for selling
foreign products that do harm; and
· add strong provisions for protection of
the natural environment in all bilateral and
multilateral trade agreements.
Canada should take similar initiatives
because our own manufacturing jobs
have also been similarly declining over
the past two decades.
According to a survey some years ago of
more than 1,000 Canadian businesses, a
fifth of Canadian manufacturers
responded to a rising Canadian dollar by
shifting production to China.
Universal values must be asserted in
dealings with Beijing. The regime
continues to rely on repression to
maintain itself in office, but what are
diplomats from democratic nations doing
effectively to show themselves to be the
friends of the poor, persecuted and
voiceless across China? What are they
doing to advance the rule of law and
human dignity?
Let’s stop listening exclusively to selfinterested
China business lobbies. It is
now clear that some economic
liberalisation in China is not necessarily
going to lead to the end of political
Leninism and ‘crony capitalism’ in Beijing.
There is no rule of law anywhere in China;
“courts” are a sham. Many “experts” on
China abroad, including Canada, kowtow
to the party-state because they think that
their careers require support by the party.
It’s time to draw conclusions about China
on trade and other issues from facts on
the ground.
Credit : Epoch Times
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