Iraq and Afghanistan

Today's paper reports that in the first month after the end of quotas on apparel and textiles (January), China managed to flood the world market in an alarming manner. Imports of these items nearly doubled compared with the previous January. Meanwhile 12,000 jobs were lost in the American textile industry in January. Last year, America's trade deficit with China was $162 billion, the largest deficit ever run by the United States with any one country. (The European Union countries was affected similarly with the end of quotas, showing an increase of 46% in imports in this area in January.) Even before this latest information, the flood of inexpensive goods into the United States, both legitimate and fraudulent, has been remarkable. The trend has been hastened by the decision of big marketers such as Wal-Mart to make China their major source of goods. For many kinds of goods, the American consumer has often found that he is either unable to buy what he is looking for that is not "made in China" or that he must pay a prohibitively higher price for the non-Chinese goods. Some discussion of these issues is available here.

The American government has done little to stem this trend. It has talked to China about revaluing its money to increase the relative cost of its products to importers. But China has made little response to this and other suggestions. It is well known that working conditions in China are very poor, wages are very low, environmental considerations are routinely ignored, and the government subsidizes many industries to get ever larger shares of the market.

It is past time the wealthier countries realized that the dream of a world unencumbered with trade barriers of any kind is not a world that they can live with if they are to maintain the standards they have managed to attain over the last half century.

Referring back to another recent posting, unless the economy and financial strength of America and its allies are maintained, the country will neither be able to afford to defend its interests nor undertake efforts to right the wrongs of the world, expand the boundaries of liberty, and improve the health and well being of the poorest sections of the globe. These latter may be responsibilities eventually accepted by China as it climbs to the top of the pyramid of economic and later military power. But recent experience suggests that taking on such responsibilities is unlikely to be high on the Chinese agenda for some time. Meanwhile, it is up to us.