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Speech: Responsible Engagement With China (6)- Responsible policies

Posted by Author on January 28, 2010

Hon. David Kilgour, J.D., German-American Institute, Heidelberg, Germany, 11 January 2010 – (cont’d)

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The Nobel laureate economist Paul Krugman has predicted that Beijing’s ongoing refusal to let its currency float will cause retaliation from the European Union and elsewhere, where high unemployment can be traced in part to Beijing’s ongoing refusal to let the yuan rise and its manufacturing focus in a world struggling with overcapacity. The party-state continues to dump consumer goods–no doubt including many made in forced labour camps– at lower-than-cost in foreign markets. The manipulated yuan creates an enormous competitive advantage for China and keeps some workers from Munich to Montreal to Manila out of work. Krugman also says that by displacing the output of foreign producers with its own low-wage goods China is arguably the prime culprit in holding back a robust recovery in global economies.

Peter Navarro, a professor at the University of California, says that consumer markets across the world have been “conquered” by China largely through cheating on trade practices. These include export subsidies, widespread counterfeiting and piracy of products, currency manipulation, and environmental, health and safety standards weakly enforced. Navarro says new trade legislation by all of China’s trade partners could help achieve fair trade through the following:

  • All economies must refrain from illegal export subsidies and currency manipulation and abide by the rules of the World Trade Organization (WTO);
  • For currency manipulation, he supports what the bi-partisan US-China Commission has recommended to the American Congress: define it as an illegal export subsidy and add it to other subsidies when calculating anti-dumping and countervail penalties;
  • Every trade partner must respect intellectual property; adopt and enforce health, safety and environmental regulations consistent with international norms; provide decent wages and working conditions; and effectively ban the use of forced labour;
  • Adopt a ‘zero-tolerance’ policy for anyone who sells or distributes pirated or counterfeit goods;
  • Defective and contaminated food and drugs must be blocked more effectively by measures which make it easier to hold importers liable for selling foreign products that do harm to people or pets;
  • Despite growing criticism, China’s party-state continues to trade its UN Security Council veto for energy, raw materials and access to markets from Angola to Burma to Zimbabwe. Increased monitoring and exposure of its party-state activities everywhere is important;
  • To reverse the ‘race to the environmental bottom’ in China, require all to compete on a level playing field and to reduce acid rain and smog affecting populations abroad; all trade agreements should henceforth include strong provisions for protection of the natural environment.

(to be con’t)

-From David Kilgour website:

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