GW alum discusses U.S. trade policy at Elliott School

An expert on trade policy stressed the need for the U.S. to form a complementary trade relationship with China at the Elliott School of International Affairs Tuesday night.

Dan Ikenson, a GW alumnus and author of several articles about trade policy, highlighted the positive influence China exerts in the U.S. economy, despite domestic distrust of a nation that just last quarter gained the status as the world’s second-largest economy.

“A loss of confidence has emerged from the recent economic recession,” said Ikenson, who is also the associate director of the Center for Trade Policy Studies at the Cato Institute. “The U.S. is experiencing slow growth while China is back on double-digit trajectory.”

He described a “global division of labor” that provides the U.S. with low-priced materials produced in China that then allow U.S. designers, retailers, marketers and distributors to prosper.

“American producers rely on Chinese factories,” Ikenson said, who added that the U.S.-China partnership supports hundreds of thousands of jobs in America.

He cited many politicians, including Sens. Lindsey Graham, R-S.C., and Arlen Specter, D-Pa., as people “who want us to treat the Chinese like criminals, but U.S. consumers have really benefited from China.”

A central theme of Ikenson’s speech was economic “dumping,” a kind of predatory pricing in which a nation sells goods abroad at a price below what is charged in the domestic market. U.S. politicians and economic analysts have long been concerned about Chinese dumping in the U.S. economy, he said.

Ikenson said that in actuality, there are many more cases of U.S. dumping in the Chinese economy. In 2009, he said, there were 36 accounts of U.S. dumping products, 24 of which were against China.

He stressed the American ideology of “us versus them.” This mentality, he said, is “magnified by the media. The media can’t resist tempting U.S. nationalism.”

Ikenson attributed this underlying tension partly to the American self-portrayal as a superpower. He explained that with China’s rise, the U.S. is threatened.

“We believe we are still the world’s kitchen, and we overexert ourselves. But things are changing, and I welcome the change,” he said.

Ikenson’s visit came during a congressional battle about Chinese trade, in which he said committees in both the House of Representatives and the Senate are voicing their support for tariffs on Chinese imports.

Chinese currency is said to be “undervalued,” causing Chinese goods to be cheaper compared to U.S. goods, potentially leading to an increase in the U.S. trade deficit with China.

“As long as we have a bilateral trade currency, we will have members of Congress that say the Chinese currency is undervalued,” he said.

Part of the problem, he said, is that the American public is skeptical about trade due to extensive media coverage of the trade deficit.

“This misconception is a product of politicking,” he said, adding that the media do not understanding how to portray trade, which is enormously beneficial to the economy.

“I think a lot of politicians know better, but they’re not out to make friends with the Chinese, they’re out to get reelected,” Ikenson said.

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