Compete and Cooperate or Confront ? China and CAFTA
Posted by Dean Kleckner
The man who was FDR’s secretary of state for most of his presidency, Cordell Hull, once offered some wise words about free trade: If goods can’t cross borders, he said, armies will.
That warning was true in the last century, and it will remain just as true in our new one.
It also helps explain why agriculture secretary Mike Johanns, commerce secretary Carlos Gutierrez, and trade representative Rob Portman traveled to China last week. We need to find ways to cooperate with the world’s most populous nation, rather than search for reasons to confront it.
There are, nevertheless, sure to be plenty of confrontations in the years ahead. A cover story in the Atlantic Monthly recently labeled U.S.-Chinese relations as “The Next Cold War.” Indeed, the American public’s concerns about China are entirely understandable. There’s less democracy in Beijing than there is in Baghdad, and China’s unelected regime insists on escalating its military spending, threatening Taiwan, turning a blind eye to North Korea, oppressing Tibet, and ignoring the intellectual property rights honored by so many other nations.
All of this helps explain why Americans are so jittery about the news of a semi-governmental Chinese entity making an $18.5 billion bid for the oil company Unocal. There are arguments to be made both for and against accepting this offer. Whatever the outcome, though, I hope our federal officials and lawmakers can find ways of integrating China into the global economy. Remember: If goods don’t cross borders, armies will.
At the same time, we must remain competitive with the Chinese--that’s what ‘goods crossing borders’ is all about. And, there’s no better way for lawmakers in Washington to assure that than by approving the Central American Free Trade Agreement. The Senate has passed it and President Bush has promised to sign it. A vote in the House of Representatives could come at any time.
Right now, perhaps you’re reaching for a map. You didn’t think China was in Central America, did you?
Technically, it’s not. But the Chinese themselves are there, as they hunt for promising opportunities. They have made deep inroads into Latin America. Over the last five years, their imports from the region have more than quadrupled and their exports have roughly tripled. “All over Latin America,” says The Economist, “there have been eager predictions of a massive boost to employment and economic growth, thanks to a new benefactor who could supplant, at least in part, the role played by American-dominated financial institutions and America itself.” Relations have grown so warm that last December, Beijing unveiled a statue of South American liberator Simon Bolivar. Last month, for the first time ever, an oil tanker left Venezuela bound for China.
On the surface, there’s nothing wrong with any of this. Overall, freer trade is good. We should hope, and work, for middle-class prosperity everywhere.
But there are important choices to make, and we want to make sure the United States remains competitive in an area of the world where it enjoys natural advantages. The nations of Latin America are forging trade deals with everybody, from the Europeans to the Japanese to the Chinese. CAFTA will help us keep the playing field level--and allow the United States to strengthen its position as the political and economic leader of the western hemisphere.
If CAFTA fails, countries all over the world--and especially in Latin America--will question our commitment to lowering trade barriers and helping our regional allies. There’s no question that a thumbs-down vote in the House would imperil the ambitious plans to create a Free Trade Area of the Americas. Some observers may even begin to agree with the pessimists who say that just as the 20th century was the “American Century,” the 21st century will belong to the Chinese.
I don’t think that’s true, and I certainly don’t think that’s inevitable. But there’s no guarantee America will keep its front-and-center place on the world stage, either. We surely won’t succeed by inertia. We must engage everywhere, and create the conditions for our future prosperity. That’s what the Chinese are doing for themselves, in Latin America and just about everywhere else. And it’s what we must do for ourselves--starting with CAFTA.
News 
The man who was FDR’s secretary of state for most of his presidency, Cordell Hull, once offered some wise words about free trade: If goods can’t cross borders, he said, armies will.
