Obama Decries Trade Provision in Cap and Trade Bill

http://www.reuters.com/article/GCA-BarackObama/idUSTRE55S02P20090629

On Sunday, following passage of his “cap and trade” legislation by the House of Representatives on Friday, President Obama denounced a provision in the bill intended to prevent U.S. manufacturers from being put at a competitive disadvantage. 

President Barack Obama on Sunday called a House-passed climate change bill “an extraordinary first step,” but spoke out against a provision that would impose trade penalties on countries that fail to cut greenhouse gas emissions.”At a time when the economy worldwide is still deep in recession and we’ve seen a significant drop in global trade, I think we have to be very careful about sending any protectionist signals,” Obama said in an Oval Office interview reported by The New York Times, the Los Angeles Times and The Washington Post.

“I think there may be other ways of doing it than with a tariff approach,” Obama said.

Oh, really, Mr. President?  And what would that be?  Since the signing of the Global Agreement on Tariffs and Trade in 1947, what measures other than tariffs have proven effective in restoring a balance of trade?   Complaining about unfair trade practices?  Complaining about currency valuations?  Cajoling others to buy more American-made products?  Scolding corporations for outsourcing?  What has all of this talk done for us?  Since our last trade surplus in 1975, they’ve gotten us a cumulative $9.2 trillion trade deficit, have bankrupted the country, saddled our children with a debt they’ll never be able to repay and have turned the wealthiest nation on earth, once its preeminent industrial power, into a skid row bum, literally begging the Chinese to keep loaning us money. 

I supported and voted for President Obama, largely because of his promises to fix our broken trade policies – amending NAFTA (the North American Free Trade Agreement) for example.  No one wants him to succeed more than I.  But, since his election, he has done nothing but disavow the protectionist measures that offer the only hope of restoring a balance of trade and financial stability.  His faith in his ability to be a good statesman and talk his way out of a trade deficit is naive.  And his complete lack of response to tariffs imposed by Mexico and blatant dumping by Japan and others goes beyond timidity, bordering on cowardice. 

His insistence upon letting other nations have their way with the U.S. market without putting up even the slightest defense is highly disappointing.  Even in the face of global economic collapse, brought on by global trade imbalances, he is unwilling to act.  Obama won a lot of votes with his promises to fix this trade situation and he’s letting all of us down.

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4 Responses to Obama Decries Trade Provision in Cap and Trade Bill

  1. Mark Hall says:

    Pete:

    GM’s June sales in U.S. DOWN 33.4%

    GM’s 2009 YTD sales in China UP 38.0%

    WHAT’S WRONG WITH THIS PICTURE?

    All this talk about a Carbon Tax (How & Why)

    In remembrance of Mr. Gene Roddenberry,I say put a tax on ALL “Carbon Based Human Life Forms”

    Say $1,000/yr. per head………..

    For the U.S. that would be approximately $325 Billion (305 million + 20 million Illegals x $1,000).

    For China that would be approximately $1.4 Trillion (Payable on demand in U.S. Treasury’s).

    This way we can kill (2) birds with (1) stone.

    BALANCE TRADE & GET OUR MONEY BACK…..

    Thanks,

    Mark

    • Pete Murphy says:

      Regarding auto sales, U.S. manufacturers with operations in China (like GM) are fond of boasting of the rate of sales increases there. But you never hear them talk about profits. That’s because there aren’t any. They’re virtually giving them away there, longing for the day when the volume and economic conditions in China rise to the level needed to turn a profit. They look at the “potential” of the market, with four times the population of the U.S., and imagine making four times the profit that they did in the U.S. during the heyday of the U.S. auto market. But it’ll never happen.

      A while back, a friend marveled at a news report he had just heard, that auto sales in China had risen to 10,000 cars per day. “Can you imagine?” he said. “That’s just unbelievable!” I then pointed out to him that auto sales in the U.S. are approximately 40,000 per day. Doing the math, he then realized I was right. The point I made was how stupid it was to trade away access to the American market in the hope of making it big in foreign markets – like the dog in the Aesop fable who drops his bone to snatch at the one he sees reflected in the water.

  2. mtnmike says:

    Pete,

    As a board member, I once asked a General Manager at a large power company why they didn’t negotiate a better deal years before during troubled times that resulted in a crippling business arrangement.

    He replied, “It’s difficult to forcefully negotiate while lying flat on your back.”

    The U.S. is totally dependent on foreign nations for daily financial capital and oil. Getting tough with those people is nearly impossible. And, that is why I didn’t vote for a young inexperienced president who promised chicken when he could only deliver feathers.
    I will note that I also did not vote for McCain.

    We often hear that “The richest nation on earth can afford to provide medical care…blah, blah, blah.” The real fact is that America is the largest debtor nation on earth.

    You and I agree that the ONLY path is one of population control, thrift, savings, and becoming a semi-self sufficient nation. However, the perceived pain in that plan is far too great for the American public to embrace. “The Devil you know,” rules supreme.

    • Pete Murphy says:

      That’s why I’m trying to get people to perceive the pain in the devil they do know. It’s worse than they think, although it’s gotten clearer over the past year.

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