Obama Shows Encouraging Signs on China, But Is It A Smokescreen?

In recent days, the Administration has made encouraging signs that it plans to enforce U.S. trade law, but is it smoke screen for advancing a free trade agenda?.

Today, it came that Senator Harry Reid and the Office of U.S. Trade Representative are in support of putting safeguards on illegal, surging Chinese tire imports.

In a letter to the President on September 2, Harry Reid said:

In order to help move U.S. trade policy forward, we must restore the confidence in our farmers, workers and domestic producers that when they work hard and play by the rules, their government will move aggressively to enforce U.S rights under trade agreements, to implement our trade remedy laws, and to fight for their interests.

The recommendation by Senate leadership and the United States Trade Representative seems to indicate that President Obama is going to follow through on his campaign promise to enforce U.S. trade laws. It also comes on the heels of encouraging news yesterday that United States Department of Commerce has decided to place tariffs on illegal pipe imports from China. [1]

However the devil remains in the details.

On a press call this week, Steelworkers President Leo Gerard was critical of a compromise tariff remedy being floated by some. U.S. tire importers have suggested a tariff of 7 to 15 percent, which Gerard characterized as being ineffective. The International Trade Commission determined that the proper remedy is a 55 percent tariff that would decrease by 10 percent annually and expire after three years, which is what the Steelworkers are advocating.

Additionally, some remain skeptical if Obama intends to enforce U.S. trade law in these instances in order to gain support for upcoming trade deals with Columbia and Panama.

Columbia has a notorious record of killing trade unionists. Since 1991, over 2,200 trade unionists have been assassinate [2]d in Columbia by corporate run gangs. Panama is considered the second biggest tax haven [3] in the world behind Hong Kong.

As a result, both deals have been unable to get through Congress, so far. However, some feel if the Administration shows its support for fair trade in these instances involving China, that it will curry favor with members of Congress that have concerns about both of these trade deals. Even Senator Reid in his letter said that enforcing U.S. trade in the China tire case is vital for winning support for future trade deals.

While the Administration is making some initially encouraging signs on trade, only over time will we know whether the Administration truly intends to pursue a policy of fair trade that leads to prosperity in all nations. Until then we must remain vigilant that they remain true to their commitment to workers right and trade that works for everybody not just Wall Street and fat cat CEO's.