End of fiber pact may mean China-US trade war

[leftchick]

http://www.dailytimes.com.pk/default.asp?page=story_5-12-2004_pg5_20

~snip~

“There’s going to be a real war here,” said Mickey Kantor, veteran of nasty trade spats as Bill Clinton’s trade representative and commerce secretary. “When the MFA goes into the distance on Dec. 31, China’s share of the world textile market will quickly rise to 50 percent and the EU, the US and developed countries with a large textile industry will feel the pain.”

A decade ago in what was hailed as a victory of free trade over traditional import barriers, global negotiators plotted the demise of the fiber pact, which since 1974 has permitted the use of import quotas to regulate the multibillion dollar annual world trade in garments.

But those negotiators didn’t foresee the meteoric rise of China’s export manufacturing sector and the MFA’s expiry as a spur to an ongoing relocation there by companies keen to tap the country’s comparative production advantages and blossoming domestic consumer market. The loss of American manufacturing jobs and record trade deficits with China have made China trade a sore issue in Washington.

China looks unbeatable: China’s combination of highly productive, low-cost labor and timeliness of delivery will in the long term help deliver the bulk of global market share to the country’s textile and garment manufacturers from a current level of 17 percent to 25 percent, said CLSA Emerging Markets consumer retail analyst Paul McKenzie.

[acmavm]

1. I'd say just by American-made products but then I'm afraid we'll all have

to go naked and gadgetless, with nothing to do.

[NYC]

2. I'll go naked & gadgetless, with nothing to do.

My own personal protest.

[schultzee]

5. BUY ONLY THE ESSENTIAL. I've been doing that for a couple of

years now.

[NYC]

7. I agree, stick to essentials.

Wear the same clothes until they are threadbare. If it isn't made in the U.S.A., don't buy it unless you really can't live without it.

[0007]

3. ....we can practice abstinence, while going butt naked!

[Petrushka]

24. See #23 (below)--For Wal-Mart, unions are made in China, too: (n/t)

[schultzee]

4. NAFTA??? Bill Clinton called people at night to lobby for our downfall

and for that he was the best republican president we real dems every had. Now the damn DLC is ruining our party. It was not fair what the republicans did to Billl, but he did one to us too.

[InvisibleBallots]

16. we have been sold out to the Communist Chinese

and both parties did it too.

[msgadget]

18. High five, Schultzee!

Democrats are moaning as if all this crap was visited upon them by the current administration when Clinton cleared the path for all we're experiencing. China should never have received favored nation status and trade agreements with no enforceable labor and humanitarian clauses are blindly destructive to the American economy. WHERE are the new jobs to replace the old going to come from when Chinese laborers living in dorms, earning less than $30/week can be do them? I don't understand the surprise.

[papau]

6. In 94 BC Forced WTO to add 5 yrs to GOP phase out of MFA Fiber agreement

In 1993 U.S. Trade Representative Mickey Kantor had to deal with pressure from China, India and other developing nations who were are worried about U.S. plans to extend the phase-out of the Multi Fiber Agreement (MFA) from 10 to 15 years.

Granted Bush's Uruguay Round was finally signed April 15 94 and took effect July 1, 1995.

But why are we blaming Clinton or Nafta ???

Folks - we have here a GOP agreement modified by Clinton while he still had a Dem Congress. At the time the WTO and the GOP and the Wall Street Journal were screaming "trade not aid"

And Clinton got killed for delaying the phase out

[sam sarrha]

8. their stuf is crap.. i'll pay more for better USA made

[kodi]

9. this is death for the US textile industry

I've 30 years in this industry, from working 3rd shift in a dye house at 17 to teaching grad school in textile chemistry at UofT, as a textile plant manager to to consulting. this tidal wave of Chinese imports will drive the US industry into its grave.

we lost the flat goods market years ago, knits were next, then apparel, now the only two major sectors left are carpets and upholstery. in the former we are losing the scatter rug market (accounting for 40% of the total carpet market) and have seen reduction in production of about 50% with the this segment of the industry moving to china and India.

with upholstery as the remaining vital US textile sector where American made goods hold a significant share of the domestic market this year alone i am seeing 60% Chinese imports in upholstery fabrics and that will rise to 90% within two years. tens of thousands of US workers will lose their jobs by 2007 in parts of the country where mill work is about the best paying job this side of a meth lab.

and what pisses me off is that the Chinese textile companies-government complex will simply out-bide US firms, accepting as routine business practice short term financial loses that would devastate a US company. the Chinese textile companies are highly subsidized by the Chinese government, they do not pay for their workers workers health insurance as the govt picks up the tap, they do not even pay for their own utilities/power, and will drive prices so low for a while until the competition folds, then they will raise their prices to recoup losses.

we see this over and over again from the Chinese since 1995. the US economy has taken a series of sustained financial hits from co-ordinated attacks by Chinese government controlled industries that are tantamount to a Chinese declaration of war against us in the devastation they have caused to the citizens of the United States.

i make no bones about it, the Chinese are out to cripple us and are using means other than military might to do it. their government has directed the economic might of 1.4 Billion people against the US that is designed to weaken the US economy and make it beholden to Chinese interests. as US financial managers worry about the next quarter's earnings, the Chinese government controlled industries are concerned about the next quarter century or more.

and it is not simply textiles, the chemical industry is next to go, then the auto industry... by 2008 the Chinese will build more cars than the US.

this is old school mercantilism we are facing here, a nation's economic policy as merely the arm of the government and its use as primarily a national defense weapon.

[Mabel Dodge]

10. Good post

very insightful and sad.

[AgadorSparticus]

11. as much as i despise the chinese gov't, you cannot blame them.

you've got to blame the greed in a few here in power that lobby and legislate to allow the chinese to do what they do. where are the tariffs? where are the tax incentives for companies to stay domestic?

[daleo]

12. Yes, very interesting

Some would say mercantilism failed in the 18th century and is doomed to fail again. I don't know if I agree or not. It may just be conservative theoreticians of the University of Chicago school, spouting dogma.

Every nation seems to have its ups and downs, though. I recall that Japan was being touted as unbeatable in the 80's, the U.S. in the 90's, now it is China's turn. But, in the long run, however you look at it, a race to the bottom is in nobody's interest.

[Poor Richard Lex]

13. China is going to Wal-mart the US

and noone in the government saw it coming?

[Petrushka]

23. For Wal-Mart, unions are made in China, too:

Why aren't U.S. workers worthy of same organizing?

by HAROLD MEYERSON

"Wal-Mart has finally found a union it can live with.

Up to now America's largest employer has opposed every effort of its employees to form a union. The proper Wal-Mart name for its workers is "associates," ...." ( snip )

"But that was the old Wal-Mart. Last month Wal-Mart announced that if its associates wanted a union to represent them, that would be hunky-dory -- as long as the union was affiliated with the All-China Federation of Trade Unions, a body dominated by the Chinese Communist Party. . . ." ( snip )

". . . When America's largest employer feels more affinity for the political legacy of Mao Tze-tung than for that of Franklin D. Roosevelt, it's time to start democratizing our own back yard."

http://www.freerepublic.com/focus/f-news/1294725/posts


(edited to correct typo)

[leftchick]

14. excellent post kodi!

thank you for a view from within.

[papau]

15. EXCELLENT POST - very good points

wish I had said that!!!!

:toast:

:-)

[msgadget]

19. And, it's so obvious

yet we continue to go willingly to the slaughter.

[fedsron2us]

20. China has been using trade to wage war for some time

I look at the price of Chinese goods in the shops and try to factor in all the costs including the retailers profit margin. My conclusion is that many of these manufacturers are trading at a loss. I know Asian workers are cheap but they would have to be paying their employers for their jobs to account for the prices I see. The whole charade is being kept going by the reluctance of Chinese banks to call in nonperforming loans and by a never ending supply of cheap money from the US. The CCP peg between the yuan and the dollar is obviously a key factor in the whole process. However, their mercantilist policies are definitely aided by the lax monetary policies pursued by the Fed under Greenspan's guidance. This may have been designed to prevent a financial crash after the dotcom bust but the real beneficiary has been the Chinese economy.

http://www.atimes.com/atimes/Global_Economy/FJ14Dj01.html

As Lenin said the capitalists will sell you the rope with which they are to be hung.

[Massachusetts]

17. Again

this is another pathetic example of poor leadership by the people we hired (voted) to work for OUR corporation (USA). Why do we keep these people employed?

No Taxation Without Representation! that statements meaning doesn't change, its the will of the people that has to change.:mad:

[nyublue]

21. Its easy to buy american: http://www.americanapparelstore.com

They've got a store in NYC that has people in it all the time: http://www.americanapparelstore.com

[msgadget]

22. It gets harder when you have to dress for business and formal occasions.