November 19, 2009

US Congress Declares Trade War on China

The US-China Economic and Security Review Commission of the US Congress released its 2009 annual report today. Timed to match Obama's return from China, the assessment is unusually bellicose in its condemnation of all things Chinese.

The report not only blames China for the current financial crisis but hints that China will be responsible for the next one! The Commission dismisses the onesie-twosie approach with WTO trade disputes as too "industry specific" and "time consuming" and for not addressing "broader issues." Instead the Commission warns "the U.S. government will have to find alternative venues." The only such alternative suggested, however, is the continual demand that China appreciate its currency.

The report's 381 pages feature scary examples where China threatens to overtake the USA supported by testimony and research the Commission paid for from organizations such as the Heritage Foundation and defense contractors well known for their established anti-Beijing views.

The Commission itself is headed by a who's who of anti-China "bomb throwers" including Larry Wortzel of the Heritage Foundation appointed by disgraced former House Speaker Dennis Hastert. Wortzel appears to be a permanently entrenched holdover from the W years - after two terms he can no longer be Chairman but is now Vice Chairman until end 2010. What the Commission and Congress cannot face is that no amount of sabre rattling will force a "Plaza Accord" with Beijing. In its search for "alternative venues" with China perhaps Congress should consider cooperation and collaboration....

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