Changing The U.S.-Asia Trade Relationship

President Obama said Saturday in Tokyo [1], Friday in the US, that "One of the important lessons this recession has taught us is the limits of depending primarily on American consumers and Asian exports to drive growth."

It seems, with his willingness to call China to account for dumping, and as concise an explanation as that of the problems with the US-Asia trade relationship, Obama understands that things have to change. One of those things is that Americans need to work more at being producers. Ideally, the Chinese will become consumers of our goods also, hopefully for good reasons like increased prosperity.

So when Obama also said that a prosperous China [2] would be a "source of strength" for the world, I think that's right. If China has a prosperous middle class, well-treated workers, a clean environment, good relationships with other countries, it's hard to see the problem.

That's not the case right now, though.

I've written previously about how Chinese export restrictions on raw materials [3], like the rare earth minerals needed to make windmills, affect manufacturing in other countries where those materials are either scarce or too expensive to produce. Now, having created a dependency for supplies like coke, China's expanding their raw materials export fees and restrictions [4] in the name of reducing their greenhouse gas emissions.

It's hard to fault them for wanting to reduce their emissions footprint, I'd certainly consider that important. Coke, for example, is coal processed at extremely high temperatures in ways that often produce human-toxic, cancer-causing compounds, as well as gas emissions that contribute to global warming.

Yet in the context of previous actions, it would be hard not to suspect that this was just a new excuse to keep raw materials access artificially cheap on behalf of their own producers. I don't have much in the way of answers regarding what to do about that, but I do have ideas.

What I'd like to see as a response in this case is an expanded commitment to research and development of coke-less production [5] of steel, because coal is something I believe we should be leaving in the ground. Or if we're going to finally get an industrial strategy, let's have one that encourages US and Chinese manufacturers to follow good pollution control guidelines [6], by leveling the playing field for good actors - there's no one in the world that deserves to live next to, or work in, a smelter that's belching out benzene, benzopyrene and cyanide for them to breathe and drink.

As human beings, we owe each other investments in clean manufacturing processes that allow all our families to live in good health. That's achievable if our international relations are equitable and negotiated with the aim of improving everyone's welfare.

Listening to Leo Gerard from the United Steelworkers and John Surma of US Steel Corporation talk two weeks ago, they seemed proud of the advances they've made in clean manufacturing and the production of new types of steel. If they had a government and investment climate that was supportive of the direction they're going, I think they'd jump at the chance to respond to the challenges posed by restrictions on highly polluting materials.

One of the major challenges in getting a climate agreement through the US Congress is the same challenge in getting one through the international climate conference in Copenhagen. There are many major industrial sectors with enough political clout to kill good agreements, but either not enough to get protection through a retooling process or a lack of will to ask for the help to change.

Though long term, there's no benefit to be had from pitting groups of people against each other in competitions that even the winners will eventually regret.

The rate of change we've all seen in our lifetimes sometimes boggles the imagination, it's hard to process. I know my grandmother couldn't get used to it. By the time she'd gotten to her seventies, she already disliked almost everything she saw about the modern world. (Except Costco. She was a big fan.) I never blamed her for it, I think it just made her feel lonely and so it was hard to fault. But for anyone who doesn't want to retire from the world and fade out, it's important to find a way to handle living in a world where even a 34 year old internet user like myself often feels behind the curve of technology and current events.

Things are going to change even more in the future. The status quo isn't an option. If we don't take our destiny in our hands and try to make it better for everyone given the resources we have, then what we'll get is an ever more painful decline. That just doesn't sound like any fun.