Obama Administration No Longer Follows Precept of Free Trade

In the third round of Sino-U.S. strategic and economic dialogue that just concluded, the U.S. promised to quickly and comprehensively acknowledge China’s market economy status through collaboration with the Sino-U.S. Joint Commission on Commerce and Trade. Although such an attitude was worthy of approval, Americans have indicated in the last two rounds of dialogue that the U.S adopted a delaying strategy concerning China’s market economy status, using it mainly as a sharp weapon of trade protectionism. This was in line with the attitude expressed by the U.S. Department of Commerce last month when it formally launched a joint anti-dumping and countervailing investigation of steel wheels made in China. China’s trade relations with the U.S. has encountered an administration, led by Obama, filled with trade protectionism tendencies.

The Obama administration no longer practices the precept of free trade. The U.S. Trade Representative’s office no longer mentions words such “free trade”, “free economy” or “trade liberalization” in the two trade policy agendas that were published in 2010 and 2011. However, these words were often seen in Bush administration’s reports. We can see from his statements that Obama truly abhors free trade. On the Export-Import Bank of the United States’ annual conference held on March 11, 2010, Obama said,”...if you ask the average American what trade has offered them, they won’t say that their televisions are cheaper, or productivity is higher. They’d say they’ve seen the plant across town shut down, jobs dry up, communities deteriorate. And you can’t blame them for feeling that way...” The tendency of this part of the speech was a typical argument against globalization and free trade.

The Obama administration possesses a dispirited attitude towards economic globalization and trade liberalization. Since a new round of economic globalization began in the 1980’s, there has always been conflict between the force that acts in cooperation with the trend of globalization and the force acting against it. Every administration since Reagan has proactively promoted trade liberalization. Trade liberalization is not only the basic concept of U.S. foreign trade, but also the mainstream U.S. foreign trade policy. Let’s just take the Clinton administration as an example. It had a Democratic Party background, faced demand from domestic political blocs such as enterprises, labor and environmentalists seeking a “fair competitive environment” and unveiled the National Export Strategy in 1993. However, the main inclination of Clinton’s administration was free trade, and it eventually achieved landmark accomplishments such as completing the Uruguay Round Negotiation and creating the North American Free Trade Agreement. The Obama administration, besides implementing an extraordinary emphasis on jobs, doesn’t differ, as compared to the Clinton administration, in promoting a “fairly competitive environment” and establishing the “National Export Initiative”. However, the Obama administration possesses a passive attitude at pushing the Doha Agenda forward. Its trade policy agenda, which has reflected such negative attitude, has not put forth any concrete new ideas to break up deadlocks in the Doha Agenda negotiations. It also has not had the prior U.S. administrations’ boldness in taking the lead in opening up domestic markets; instead, it has requested that other countries make concessions first.

Moreover, the Obama administration advocates the inevitable connection between expansion of exports and restriction of imports. Expanding exports is at the core of Obama administration’s foreign trade policy. At the same time that the Obama administration launched the “National Exports Initiative,” it definitely adopted policies and actions to limit imports. Its biggest steps to restrict imports were the purchase of American goods and the implementation of special protection measures toward tires made in China. In addition, in 2009, the U.S. proactively adopted measures including anti-dumping and countervailing policies to control imports, and there were thirteen tariff duties collected under the name of anti-dumping as well as six tariff duties levied under the tag of countervailing in the same year. Most of the products levied with tariff duties were exported by China.

The Obama administration has used fair trade as an excuse to limit imports; therefore, it is very easy to find words like “fair” in trade policy agendas. The administration seeks to open the markets of opposing countries under the flag of “fair trade”, especially in China. The U.S. not only pressures China on the issue of exchange rate but has utilized the Sino-U.S. strategic and economic dialogue mechanism to demand that China open its markets. While requesting China to open its market, the U.S. also has repeatedly launched “Anti Dumping, Countervailing and Safeguards Measures” investigations at Chinese products. At the same time the U.S. is accusing China for having too much trade surplus, it delays making adjustments towards its own export regulation policies. While claiming that China’s foreign investments and manufacturing policies incline to protect China’s domestic enterprises, the U.S. forces its optical fiber enterprises to have joint ventures with Chinese enterprises and frequently blocks Chinese enterprises from buying American enterprises. The Obama administration has been selling trade protectionism under the flag of “fair trade”; thus, while more employment opportunities have been created for Americans, more and more foreign workers have lost their jobs.