Losing a battle in the trade war

Last week, while the auto supply industry was being turned upside down by Delphi Corp.'s announcement that it was seeking reorganization under Chapter 11 bankruptcy, U.S. trade officials were in China trying to address the challenges facing another U.S. industry -- textiles.
By week's end, they failed.
David Spooner, the chief U.S. negotiator, gave little insight into whatever progress the talks may have made. "We have not come to an agreement that meets the needs of our domestic manufacturers and retailers," Spooner said in a prepared statement. "Our overall goal, as we've said all along, is to reach a longer-term solution that will permit greater stability in textile and apparel trade."
Meanwhile, Chinese textile exports continue to soar, as they did after the end of a worldwide quota system on Jan. 1. And American textile jobs continue to be lost.
U.S. manufacturers say 31 textile plants have been forced to close just this year because of the sharp increase in Chinese shipments. Those plants represent thousands of jobs.
The United States has lost about 1 million of the 1.6 million textile jobs it had 20 years ago.
Our town
Northern blue collar towns like Warren, Dayton and Flint, Mich., can empathize with Erwin, N.C., a mill town that used to produce denim for much of the world. At its peak, it had 2,500 textile jobs. Now it has none.
Meanwhile, China's spokesmen tend to wax philosophical about trade issues. Chu Maoming, a spokesman for the Chinese embassy in Washington said last week that China doesn't want trade issues with the United States to be politicized.
"It is natural to have some surplus or deficit because the volume of trade (between the United States and China) is so big," Chu said. "Business is business. When you do business, you might make profit, you might lose, but the Chinese government's policy is not seeking a trade surplus over the United States."
Easy for him to say when the U.S. trade deficit with China last year was $162 billion -- higher than any the United States has ever had with any country. And it's on track to hit $210 billion this year.
The demand for manufacturers to hold down costs is real, and the need for the United States to be able to compete in the world market place is equally real. But the bottom line is that the United States cannot afford trading relationships that result --for whatever reason -- in sending $5 billion every week to a country that keeps its costs down through government control of its markets and workforce, manipulation of its currency, disregard for the environmental consequences of manufacturing processes and wholesale piracy of intellectual property.