China Deal Redux

Doug Henwood dhenwood at panix.com
Wed Feb 16 08:41:21 PST 2000


Max Sawicky quoted:


>These claims are misleading. The Administration has proposed to
>facilitate China’s entry into the WTO at a time when the U.S.
>already has a massive trade deficit with China. In 1999, the U.S.
>imported approximately $81 billion in goods from China and exported
>$13 billion – a six-to-one ratio of imports to exports that
>represents the most unbalanced relationship in the history of U.S.
>trade. 2 While exports generated about 170,000 jobs in the United
>States in 1999, imports eliminated almost 1.1 million domestic job
>opportunities, for a net loss of 880,000 high-wage manufacturing
>jobs.

This is pretty standard arithmetic for anti-free traders, but is it justified? With some 22 million new jobs in this expansion, talk of job loss lacks political resonance - but let's leave cycles out of this. The import job loss numbers just take the free traders' hype and put negative signs in front of it: what if both set of claims are overblown? (Does Scott adjust for sectors? If exports are in high-wage sectors and imports in low-wage, is such direct equivalence justified? Were imports from China restricted, would there be a one-to-one replacement by domestic production? Would higher U.S. wages mean higher prices and therefore less expenditures on other goods & services?) And if trade in general does stimulate growth, then employment overall is higher than it would be without trade, so talk of job loss is kind of academic.

Doug



More information about the lbo-talk mailing list