U.S. Creates Another Toothless Organization to Handle Unfair Trade

The Administration, smarting from accusations that it has done too little for the manufacturing sector because of a perception that American jobs have been eroded by the unfair trade practices of China and other emerging nations, created yet another government organization to handle the problem.

U.S. Trade Representative Ron Kirk and U.S. Commerce Secretary John Bryson announced the creation of the Interagency Trade Enforcement Center (ITEC). Why the Commerce Department and U.S. Trade Representatives cannot promote trade enforcement on their own is a mystery. Creating another level of government is hardly an answer.

According to the announcement of the launch of the ITEC:

“President Obama took a major step toward leveling the playing field for American workers and businesses today in establishing the Interagency Trade Enforcement Center, a new trade enforcement unit to investigate unfair trading practices worldwide,” said Secretary Bryson. “The Commerce Department is committed to making it as easy as possible for U.S. businesses to build things here and sell them everywhere, because we know that when American businesses and workers get a fair shot, they can compete and win. I look forward to working with USTR and other federal partners to make sure that our foreign trade partners play by the rules.”

The Administration has refused to let the Treasury Department name China a currency manipulator as it has the chance to do twice a year in a report done for the Senate. The department has backed down from the threat to apply this label more than once, saying that it is better to negotiate with the People’s Republic. If so, the talks have done little to changed China’s oft-criticized practice of manipulating the yuan. Geithner even traveled to China in October 2010 to meet with China’s Vice-Premier Wang Qishan. After that meeting, Geithner said that the People’s Republic was “committed” to letting the yuan to go up in value. Very little has happened on the matter since then.

Congress has attempted to take up the issue of the trade practices of China. So far, no legislation has come out of both houses to address the issue. The congressional activity does not appear to have caused the People’s Republic to re-evaluate its trade practices, although it is hard to imagine any other threat serious enough to push the Chinese on the matter.

Without a powerful mandate, and with no enforcement power of its own, the Interagency Trade Enforcement Center represents the creation of another worthless federal agency. It also demonstrates to the Chinese that there is still no real effort by the Administration to press the People’s Republic hard on trade issues.

Douglas A. McIntyre