It surprises many people to learn that the United States exports more merchandise than China. At least it did in 2006, when our exports were worth a little more than $1 trillion and China’s were worth a little less, according to data released last week by the World Trade Organization.
In truth, however, the Chinese already have caught up and passed us. During the second half of 2006, they exported more than we did, for the first time ever. The trend is bound to continue. By this time next year, when the WTO releases a new set of figures, the United States will have officially slipped behind China and become the world’s third largest exporter.
Germany is currently in first place, with exports worth more than $1.1 trillion last year. China is poised to surpass it as well.
Given China’s high growth rate, it was probably inevitable that the world’s most populous country would overtake us. Maybe you assumed that it already had.
Fortunately, our own export economy remains healthy. It continues to grow and provide many excellent jobs at good wages. We should look for ways to expand it further--and move ahead of Germany, a country that we led just a few years ago, as soon as possible.
The key to our future competitiveness and prosperity is not to shy away from international markets, but to embrace them. We do that by not reverting to isolationism and building a wall around our country.
Worried about the trade deficit? If so, then the best strategy for closing it involves boosting America’s foreign trade through negotiations with other governments. Congress could deliver a big boost to U.S. exporters by approving free-trade agreements with South Korea, Columbia, Peru, and Panama.
The very worst approach is to slam the door shut on these opportunities. That’s why the Bush administration’s recent decision to slap a new tariff on certain Chinese paper products is so distressing.
Washington says that Beijing unfairly subsidizes its glossy paper exports, which may in fact be the case. Yet that claim is exceedingly difficult to prove. Traditionally, the United States hasn’t bothered to make this sort of argument with respect to Communist economies. China’s command-and-control government has its hand in just about everything.
But let’s assume that it’s true. It would mean that the Chinese are selling us the raw goods that go into magazines and brochures at a discount, saving U.S. consumers a little bit of money. What’s wrong with that?
The ‘protectionists’ say it represents a dire threat to the domestic paper industry. But then they’ve never met a tariff they didn’t like. And that’s the problem with this paper tariff: It could mark the opening shot in a destructive trade war. The tendency of trade wars is for them to escalate, in a series of tit-for-tat reprisals that limit our economic prospects rather than enlarge them.
Trade wars are especially bad for farmers. Not only do we rely heavily upon foreign markets in general, but China in particular is an important market for us. It has more than a billion mouths to feed, and in the future it will increasingly rely upon American growers and producers to fill them.
To be sure, the Bush administration has taken responsible steps to combat trade problems with China. A recently-filed complaint with the WTO takes aim at the severe problem of pirated movies, music, and books. Moreover, the White House has resisted some of the worst proposals to come out of Congress. One bipartisan bill would slap a 27.5 percent tariff on every Chinese import. That’s the economic equivalent of adding a huge new tax onto your Wal-Mart bill.
The new paper tariff might be a worthwhile risk if it were part of a political deal to approve one or more of the four trade agreements now awaiting congressional consideration, or perhaps to extend Trade Promotion Authority beyond its expiration this summer.
Yet there’s no hard evidence of any such bargain. Taken on its own, the tariff sends a confusing signal. Will the Chinese interpret it as the opening salvo in a trade war? Let’s hope not.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology. Mr. Kleckner is a former American Farm Bureau president.
News 
It surprises many people to learn that the United States exports more merchandise than China. At least it did in 2006, when our exports were worth a little more than $1 trillion and China’s were worth a little less, according to data released last week by the World Trade Organization.
