Time to tear up free trade agreements
Glenwood Springs, CO Colorado
The free trade follies are getting ever more ridiculously dysfunctional. The latest news is that seven American solar panel makers have filed a broad trade case in Washington against the Chinese solar panel industry.
They accuse China of providing its solar industry with many billions of dollars in subsidies in the form of deeply discounted loans, land, electricity, water and raw materials, as well as cash grants and tax breaks.
American federal subsidies for solar power, by contrast, totaled a comparatively modest $1.13 billion in the 2010 fiscal year. And the Obama administration had hoped that those subsidies would help an American solar manufacturing industry get off the ground and provide a lot of jobs here at home.
Instead, not only the famously subsidized Solyndra Corp., but two other American solar energy companies have just recently filed for bankruptcy protection. The three companies represented one sixth of our solar manufacturing capacity. Most of the surviving U.S. solar companies, meanwhile, have been laying off workers, closing factories or moving production to China.
The difficulties of our solar manufacturers are definitely attributable to China’s determination to capture the U.S. and world markets.
China exports 95 percent of its solar equipment production at below any real cost of production. And this has pushed down the cost of wholesale panels in the U.S. from $3.30 a watt of capacity in 2008 to $1.20 recently. And China is doing the same with wind turbines and other green industries.
The trade case, filed at the Commerce Department, seeks tariffs of more than 100 percent of the wholesale import price of solar panels from China. If the tariffs are granted, China will appeal to the World Trade Organization (WTO).
To my mind, the whole thing is just one more example of the absurdity of all the free trade agreements and the huge WTO bureaucracy of unelected international civil servants set up to settle the complex disputes that inevitably arise in relation to these agreements.
There is no rational reason for free trade with China. The only reason they can make anything cheaper is that their workers receive very little pay and their companies are required to pay virtually nothing for environmental costs or cleanup.
The carbon footprint of shipping all these solar panels and other large items across oceans is another problem. Long supply lines burn more fossil fuels and cause more pollution. So it is sadly ironic to encourage long-distance transport in the case of solar panels.
Any kind of talk about “free” markets and trade in relation to China is absurd. China’s economy is entirely government-managed, and the only freedoms, economic or otherwise, are those the government chooses to allow.
China is foolish to subsidize cheap panels for export to the U.S. They should be producing panels mainly for their own use since their pollution problems are horrendous. At the same time, they have already accumulated more U.S. dollars than they can possibly use in the foreseeable future.
China is a sovereign nation, free to do as it sees fit. But just as I respect China’s right to run its economy as it wishes, I think we should get rid of all these free trade agreements and run our economy according to what is best for our citizens.
If we think it wise to develop a solar power industry here at home, and I do, let’s do it. If we have to protect it with tariffs because other countries want to sell here at subsidized prices, let’s set our tariffs wherever we want or need to.
And don’t let anyone tell you that’s a terrible thing called “protectionism.” The truth is that every major industrial nation, including the U.S., built up its economic power with a regime of whatever tariffs were needed to protect desired industries plus heavy government investment in infrastructure.
We are a sovereign nation, and neither the president nor the Senate should have tied the hands of successor governments with all these free trade agreements. We should tear them up. They were and are simply part of the agenda of the corpocracy to make huge profits by outsourcing American jobs to low wage countries and gutting American industry.
“What Do We Really Want?” appears on the second and fourth Thursdays of the month. Mary Boland is a retired teacher and journalist, a proud grandmother, and a longtime resident of Carbondale. Follow her on twitter@grannyboland.
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