The above-linked Reuters article was too good to let pass without comment. It seems that Asian leaders have gotten together to discuss how to go about reducing their dependence on exports to the U.S. in order to correct global trade imbalances.
Asia-Pacific leaders called on Sunday for regional-wide free trade and other measures to reduce dependence on the United States and big Western markets as Asia leads the way out of the global economic downturn.
… Thai Prime Minister Abhisit Vejjajiva, host of the meetings, said Asia clearly needed a new growth model leaning less on big Western trading partners and more on Asia-wide trade pacts. The global financial crisis, he said, bore this out.
“The old growth model, where simply put we have to rely on consumption in the West for goods and services produced here, we feel will no longer serve us as we move to the future,” Abhisit told a news conference.
There’s no doubt that leaders now understand that persistent trade imbalances can’t be sustained – that they ultimately lead to economic collapse. They believe that through a regional Asian trade bloc, they can boost their economies and stimulate domestic consumption to such an extent that they will have no capacity for supplying America’s need for products. Apparently, they see a day when a customer at a Toyota dealer is simply turned away with the explanation “Sorry. We don’t have any more cars available to sell.” That must be what they envision because, unless they stop selling to the American market, the trade imbalance will persist.
The very idea that they are genuinely anxious to abandon their dependence on exports to the U.S. is laughable. If anything, they would like nothing better than for the U.S. to boost its imports. Imagine if the U.S. took steps to re-balance trade and break its dependency on imports from Asia. They’d be howling bloody murder, calling us protectionists and complaining to the World Trade Organization.
Hey, Asia! Want to cut your dependency on the U.S. and re-balance trade? It’s easy! Just start closing your Toyota, Nissan, Honda, Suzuki, Hyundai and Kia dealerships in the U.S. When WalMart places orders for container ships-full of Chinese products to stock their shelves, politely reject the orders and suggest that we make the products ourselves. Problem solved! Or here’s another idea: start buying as much from us as we buy from you.
We all know it’d never, ever, ever happen. It’s all just another ploy to buy more time to sustain the trade imbalance they’ve enjoyed for decades at Americans’ expense. Talk, talk, talk. For decades we’ve listened to them talk about lowering trade barriers, ending currency manipulation and protecting intellectual property. Now it’s talk about stimulating their domestic economies. That should be good for another decade or so of more talk, and we all know that talk is the most we can expect from America’s cowardly leadership.
The only way that global trade imbalances, especially America’s huge trade deficit in manufactured goods, will ever be corrected is through tariffs imposed by the U.S., not just on Asian nations but on all over-populated nations, forcing the needed correction and bringing millions and millions of high-paying manufacturing jobs back to the U.S.