It is rare when a government official actually blames himself for his mistakes. That straight talk occurred in the June 4 issue of Foreign Policy in Focus when Robert Cassidy, President Clinton's Assistant U.S. Trade Representative for Asia and China, took himself to task for the trade agreement he negotiated with China. He began:
As the principal negotiator for the landmark market access agreement that led to China's accession to the World Trade Organization (WTO), I have reflected on whether the agreements we negotiated really lived up to our expectations. A sober reflection has led me to conclude that those trade agreements did not.
Cassidy notes that only two groups benefited from our trade agreement with China: "multinational companies that moved to China and the financial institutions that financed those investments, trade flows, and deficits." The American economy and the American worker were the big losers with up to 2.5 million manufacturing jobs lost.
Here is his passage in which he explains why his "free trade" recipe was flawed, even though he succeeded in reducing Chinese tariffs:
China has adopted an export-led development strategy [italics ours], the centerpiece of which is a currency that is undervalued by 20-80%, with the consensus leaning toward 40%. Thus China's wages, in U.S. dollar terms, are 40% cheaper than they would have been if the currency were allowed to freely float. Similarly, foreign investors receive a 40% subsidy to develop operations in China. To add insult to injury, our exports are taxed at an additional effective 40% rate.
We would use the less-charitable term mercantilism to describe what Cassidy calls China's "export-led development strategy." The goal of a mercantilist strategy is not only to maximize exports, but also to minimize imports in order to steal industry from one's trading partners.
If you add the two manipulations mentioned by Cassidy together, the approximately 40% added by Chinese tariffs and value-added taxes and the approximately 40% added by Chinese currency manipulations, you find that American exports face the equivalent of an 80% tariff when being sold in China while Chinese exports to the United States face no tariff and get a 40% currency-manipulation subsidy from the Chinese government. With our trade deficit with China rising from $229 billion in 2006 to $252 billion in 2007, is it any wonder that American manufacturers are laying off workers?...
Follow the following link to read the entire commentary: http://www.americanthinker.com/2008/06/straight_talk_from_clintons_tr_1.html