Download - Major Issues in International Trade
Major Issues in International Major Issues in International TradeTrade
Currency manipulationCurrency manipulation China and other Asian countries keep the value of their China and other Asian countries keep the value of their
currencies artificially low to make their exports cheaper and currencies artificially low to make their exports cheaper and imports more expensiveimports more expensive
SubsidiesSubsidies China has provided billions of dollars in subsidies, directly and China has provided billions of dollars in subsidies, directly and
indirectly, to its steel industryindirectly, to its steel industry
Attempts to weaken the trade lawsAttempts to weaken the trade laws Multinational corporations that want to be able to rely on Multinational corporations that want to be able to rely on
dumped and subsidized merchandisedumped and subsidized merchandise
Climate changeClimate change Some solutions would encourage U.S. manufacturing to move Some solutions would encourage U.S. manufacturing to move
to China and elsewhere, leading to greater greenhouse gas to China and elsewhere, leading to greater greenhouse gas emissionsemissions
U.S. Dollars per Chinese U.S. Dollars per Chinese YuanYuan
Exchange Rate (1993-2008)Exchange Rate (1993-2008)
0.10
0.11
0.12
0.13
0.14
0.15
0.16
0.17
0.18
Mar-93
Jun-93Sep-93Dec-93M
ar-94Jun-94Sep-94Dec-94M
ar-95Jun-95Sep-95Dec-95M
ar-96Jun-96Sep-96Dec-96M
ar-97Jun-97Sep-97Dec-97M
ar-98Jun-98Sep-98Dec-98M
ar-99Jun-99Sep-99Dec-99M
ar-00Jun-00Sep-00Dec-00M
ar-01Jun-01Sep-01Dec-01M
ar-02Jun-02Sep-02Dec-02M
ar-03Jun-03Sep-03Dec-03M
ar-04Jun-04Sep-04Dec-04M
ar-05Jun-05Sep-05Dec-05M
ar-06Jun-06Sep-06Dec-06M
ar-07Jun-07Sep-07Dec-07M
ar-08Jun-08Sep-08
U.S. Dollars per YuanSource: Pacific Exchange Rate Service
Illegal and Abusive SubsidiesIllegal and Abusive Subsidies Discounted Land CostsDiscounted Land Costs
Discounted Energy CostsDiscounted Energy Costs
Low Cost LoansLow Cost Loans
Debt ForgivenessDebt Forgiveness
Lack of Environmental ComplianceLack of Environmental Compliance
0
100
200
300
400
500
600
700
Millio
ns of
Met
ric T
ons
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010Chinese Steel ProductionChinese Steel Production
1996-20101996-2010
Total Production of Crude Steel – International Iron & Steel Institute (IISI), Steel Statistical Yearbook 2007 and Crude Steel Statistics 2007
Estimated Estimated 647 mmt by 2010647 mmt by 2010
0100200300400500600700800900
Billi
ons
of D
olla
rs
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
U.S. Trade DeficitU.S. Trade Deficit1997-20081997-2008
U.S. Trade in Goods with World (Seasonally Adjusted) in Billions of Dollars through June 2008 (projected through Dec. 2008); U.S. Census Bureau
China willChina willaccountaccount
for over 28%for over 28%of the U.S.of the U.S.
Trade DeficitTrade Deficitin 2008!in 2008!
U.S. Manufacturing Jobs vs. Trade Deficit (2000-2008)
13000
14000
15000
16000
17000
18000
Mar-00
Jun-00
Sep-00
Dec-00
Mar-01
Jun-01
Sep-01
Dec-01
Mar-02
Jun-02
Sep-02
Dec-02
Mar-03
Jun-03
Sep-03
Dec-03
Mar-04
Jun-04
Sep-04
Dec-04
Mar-05
Jun-05
Sep-05
Dec-05
Mar-06
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08
U.S
. Em
ploy
ees
in M
anuf
actu
ring
(in T
hous
ands
)
0
100
200
300
400
500
600
700
800
900
U.S
. Tra
de in
Goo
ds D
efic
it in
Bill
ions
of D
olla
rs(O
ver P
revi
ous
4 Q
uarte
rs)
Source: U.S. Census Bureau, U.S. Bureau of Labor Statistics
Trade DeficitTrade Deficit
Manufacturing JobsManufacturing Jobs
U.S. Manufacturing JobsU.S. Manufacturing Jobs(in thousands)(in thousands)
10,000
12,500
15,000
17,500
20,000
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Over 4 million manufacturing jobs have been lost since Over 4 million manufacturing jobs have been lost since manufacturing peaked in 1998manufacturing peaked in 1998
March 199817.6 Million Jobs
August 200813.4 Million Jobs
North Carolina North Carolina Manufacturing JobsManufacturing Jobs
400,000
500,000
600,000
700,000
800,000
900,000
199719981999200020012002200320042005200620072008
Nearly One of Every Three North Carolina Nearly One of Every Three North Carolina Manufacturing Jobs Has Been Lost in the Last Manufacturing Jobs Has Been Lost in the Last
Decade.Decade.
Endangered Manufacturing Endangered Manufacturing IndustriesIndustries
0
10,000
20,000
30,000
40,000
50,000
60,000
Man
ufac
turin
g Jo
bs
Glass Containers
Plumbing Fixtures
Small Electrical
Appliances
Rolled, Drawn,
Extruded Copper
Pottery Ceramics
Hardware
Hand & Edge Tools
Office Supplies
19942008
50% 44%
59%
41%
46%
45%
38%
52%
Source: U.S. Bureau of Labor Statistics, Current Employment Statistics Survey, Not Seasonally Adjusted
The State Crisis: Manufacturing Jobs The State Crisis: Manufacturing Jobs LostLost
June 1998 to December 2007June 1998 to December 2007
The Multinationals’ ViewThe Multinationals’ View Large multinational manufacturers and Large multinational manufacturers and
trading companies (“MNCs”) generally trading companies (“MNCs”) generally oppose any strengthening of the trade lawsoppose any strengthening of the trade laws
Their chief focus is maximizing worldwide Their chief focus is maximizing worldwide profits, not achieving maximum production profits, not achieving maximum production and employment in the United Statesand employment in the United States
These companies have a vested interest in These companies have a vested interest in bringing dumped and subsidized imports bringing dumped and subsidized imports into the United Statesinto the United States
Because of their size, they have substantial Because of their size, they have substantial political cloutpolitical clout
U.S. - China Direct U.S. - China Direct InvestmentInvestment
(2000 – 2007)(2000 – 2007)
Source: The U.S. Bureau of Economic Analysis, Direct Investment, Direct Investment Position on a Historical-Cost Basis
0
5
10
15
20
25
30
Billi
ons o
f U.S
. Dol
lars
2000
2001
2002
2003
2004
2005
2006
2007China DirectInvestment in U.S.U.S. DirectInvestment in China
$28.32 Billion
$28.32 Billion
$1.1 billion$1.1 billion
Major Issues in International Major Issues in International TradeTrade
Currency manipulationCurrency manipulation China and other Asian countries keep the value of their China and other Asian countries keep the value of their
currencies artificially low to make their exports cheaper and currencies artificially low to make their exports cheaper and imports more expensiveimports more expensive
SubsidiesSubsidies China has provided billions of dollars in subsidies, directly and China has provided billions of dollars in subsidies, directly and
indirectly, to its steel industryindirectly, to its steel industry
Attempts to weaken the trade lawsAttempts to weaken the trade laws Multinational corporations that want to be able to rely on Multinational corporations that want to be able to rely on
dumped and subsidized merchandisedumped and subsidized merchandise
Climate changeClimate change Some solutions would encourage U.S. manufacturing to move Some solutions would encourage U.S. manufacturing to move
to China and elsewhere, leading to greater greenhouse gas to China and elsewhere, leading to greater greenhouse gas emissionsemissions