Many countries find it appropriate to enact protectionist and mercantilist polices to their individual advantage. The U.S. generally does not, however, citing its ideological commitment to free trade.
As a result, steel manufactured in Pittsburgh is competing
against steel manufactured in China with devalued currency, government subsidies, deeply suppressed labor rights,
and lower (cheaper) environmental and safety standards. Many products imported
into America violate safety
standards that U.S.
manufacturers are required to obey, like lead-based
paint in toys and pesticides in foods.
American producers bear the cost of higher standards for the benefit of
American citizens. Other countries avoid these costs with minimal consequences
in the U.S.
market.
The G-20 Summit in Pittsburgh provides an opportunity for Americans to look at what's happening, and ask hard questions. It provides opportunity to move beyond shibboleths of free trade and protectionism, and to question the true functioning of the market. Obama's decision to apply tariffs to remedy the � ���"market disruption� �� � of tires from China is a first step in this new direction.
The Summit
also provides an opportunity to examine American patterns of production and
consumption. Even when the economy was growing, America ran a current account
deficit in excess of $700 billion every year. We borrowed $2 billion every day
to cover the difference. That might have worked well for the countries we
bought and borrowed from � ��" but it worked less well for America. It was never sustainable,
anyway.
As the G-20 leaders plan a recovery from the global downturn, they should not assume that the United States will remain the world's consumer� ��" spending more than we earn, and paying for it with personal and national debt. The G-20 must chart the process by which the global economy that emerges from the crisis is more balanced, and less dependent on U.S. consumption. Growth must be sustainable in Pittsburgh as well as Beijing.
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