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Internal Woes Don't Justify Protectionism

After a little action and some rhetoric between the United States and China on the latter's rapid textile export growth, two top US trade officials came to Beijing over the weekend to meet with their Chinese counterparts. 

US Secretary of Commerce Carlos Gutierrez called on the Chinese side to understand the political pressure the US government bears over the textile issue.


He is honest, but his point is weak.


Domestic politics is no excuse for violating international agreements.


Domestic problems should be resolved domestically. Letting trading partners and free trade as a whole pay for one's internal woes does not look good, and is not acceptable.


The liberalization of the textile trade since the beginning of this year is a result of an agreement devised within the World Trade Organization (WTO).


Developed WTO members such as the US and European nations signed the agreement as a concession to developing members.


What the rich countries obtained was wider market access for their high-value products. They achieved that end.


Their textile industries can be said to have paid a price in this process. But they paid it for the strong industries of their own nations. The US and the European Union textile workers are not sacrificing themselves for their peers in developing countries such as China.


In fact, the US and EU could have taken steps to protect against the impact of the liberalization of the textile trade. They had 10 years to do so after the agreement was signed.


They could have helped textile enterprises upgrade or worked out other internal solutions to prevent their workers from suffering.


But they did very little, which was a mistake.


When the real impact arrived, they blamed China, and quickly moved to breach the agreement and attempted to shift the pressure to Chinese textile workers.


This is sheer protectionism.


Both the US and the EU should reconsider their approach of mixing domestic politics with international trade too much.


If other WTO members also take this approach it will be disastrous for the organization, and the course of free trade.


In fact, the Chinese side has showed its flexibility on the issue by announcing on May 20 to impose higher export tax on some of its textile products, a move ignored by the US and the EU.


China has now revoked the tax, and Commerce Minister Bo Xilai has also hinted at possible retaliation China could take.


But still he said China does not want a trade war and is willing to solve the problem through consultation.


The messages that Chinese officials delivered indicate that they could accept a result that both safeguards China's interests and leaves room for the restructuring of the US and EU textile industries.


Gutierrez and US trade representative Rob Portman -- who also joined the talks with Chinese officials -- now have first-hand knowledge about China's position.


They are expected to go home with this understanding: The Chinese can be cooperative, but they refuse to be a scapegoat for US domestic problems.


(China Daily June 6, 2005)

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