Either the U.S. will lose much of its industrial base while multi-national corporations exploit Chinese labor and destroy the environment, or the authoritarian Chinese regime will be slowly eroded away by an influx of western goods and culture.
Those are the two extremely different answers politicians and economists give when asked what will happen if the federal government continues to push for permanent normal trade relations with China. The House passed its version of a bill to stabilize trade relations May 24 by a vote of 237 to 197. The Senate is now opening its debate on the issue but is expected to also pass a similar bill.
State representatives and local economists have been divided on the issue and what it will mean for Oregon.
Rep. Peter DeFazio (D-Springfield) has been one of the fiercest critics of opening trade with China. DeFazio said that the deal will only let larger corporations exploit workers in China because their government does not let its workers unionize, which keeps wages low.
“It’s just capital chasing the cheapest, easily exploitable labor around the world,” DeFazio said of the deal.
DeFazio also said the deal would hurt the U.S. economy. He said once trade relations open up with China there will be a flood of companies leaving the country, which will leave U.S. workers looking for jobs. While supporters of the deal say it will open up vast new markets for U.S. agricultural products, DeFazio scoffs at the notion, saying the Chinese government has written into their part of the deal restrictions on U.S. goods.
“The Chinese bought one load of wheat from Portland just to look good,” he said, adding that they have no intention to buy more.
DeFazio couldn’t say specifically how Oregon and the rest of the country’s economies will be affected, but he said the state will feel “some of the pain” from the deal. Not only will there be economic consequences with the deal, DeFazio said there will be dire environmental consequences as well.
“Poor water quality and air pollution are monumental problems in China,” he said. “Environmental conditions will only get worse as companies move additional factories to China.”
Bruce Blonigen, an economics professor at the University who studies international trade, said the trade agreement with China will be an “excellent deal.” Blonigen did not give credence to the argument that the deal will hurt the U.S. economy because he believed it was good for China and the United States.
Some jobs will move to China, Blonigen said, but those will be the ones that don’t require too many skills. There will most likely be an increase in high-skill jobs in the U.S. export sector because of the deal, which will offset job losses in manufacturing, he said.
He also said by getting China into the global economy, the country’s people will develop a demand for Western goods and develop a demand for Western political freedom. He said by continuing to isolate China the United States could “seriously miss out” on the huge Chinese market if Europe were to tap it first.
Oregon and the rest of the West Coast states also stand to benefit from the deal because they have been active traders with Asia for some time, Blonigen said. The growing technology industry in Oregon stands to benefit the most from trading with China, Blonigen said.
“Oregon depends quite a bit on Asian populations,” he said. “For Oregon, this is potentially a good deal.”
While Blonigen does concede that there will be some economic losses in the short run because of the deal, he said the economic benefits from gaining such a large trading partner will reap large rewards in the long run.
Environmental groups have been longstanding critics of China, which they say has been recklessly irresponsible with its natural resources and negligent in monitoring its factories for environmental abuses. Ben Unger, a volunteer at the Oregon State Public Interest Research Group, said the group has not been too active in international causes but has worked with the ecopledge.com program to stop the construction of the Three-Gorges Dam in China on the Yangtze River. He also said the group has been trying to stop U.S. corporations from “enabling [the Chinese] to build environmental disasters.”
Rep. Earl Blumenauer (D-Portland) voted in favor of the deal, saying isolationism has not worked in Cuba and will not work with China. He said it is imperative that the world’s most powerful nation link ties with the world’s oldest culture and largest population. To do so would modernize China and ensure that the country can quickly improve its environmental standards he said.
The deal will also set the stage for improving environmental and political standards in China.
“With this agreement … we will have firmer footing in the Chinese economy,” he said in a written statement. “We will have beachheads and inroads of the type that so terrified Stalin and continue to terrify the Chinese dictators.”