Barack Obama continued his tour through the swing states in Michigan yesterday.  He gave a speech outlining his economic proposals that could specifically help economically distressed communities like Flint.

For a few moments Senator Obama sounded a lot like, Senator John McCain: “I believe in free trade,” said Obama, “It can save money for our consumers, generate business for U.S. exporters, and expand global wealth.”  However, Barack Obama emphasized that there are significant problems with the trade deals that have been negotiated recently, trade deals without environmental and labor standards, or the agreements that undermine the long-term interests of the American industries. 

Obama stated: “Allowing subsidized and unfairly traded products to flood our markets is not free trade and it’s not fair to the people of Michigan. We cannot stand by while countries manipulate currencies to promote exports, creating huge imbalances in the global economy. We cannot let foreign regulatory policies exclude American products.” 

Senator’s long-term plan to ensure America’s continued economic growth and prosperity includes investments in secondary and higher education to create a work force that is able to compete globally; a new energy strategy that weans America off foreign oil and invests in research and development, and the manufacturing of “green” technologies in the U.S.; a more efficient health care system that ultimately costs less and allows American businesses to stay competitive; investment in scientific research and in our infrastructure to meet our current and future needs.
 

The Primary process is inevitably winding down (who would have thought that was going to happen?). The last primaries will take place on June 3 in Montana and South Dakota. A recent AP article claims that “free trade issue dropped as race finished in Montana.”  The article explains that trade is not a crucial issue in Montana and South Dakota because both states rely on agricultural exports and therefore need open overseas markets.

However, trade is a complex issue and you can not ignore the losers of free trade just because trade has benefited some.  Manufacturing is a significant component in all states’ economies.  Manufacturing contributes $1.5 billion to Montana’s GSP; and $3.1 billion to South Dakota’s GSP.  Unfortunately, since 2000, these states lost 1,500 and 1,100 manufacturing jobs respectively.

The fact is both Hillary Clinton and Barack Obama have clearly stated their positions on trade and that record is available to the public.  The voters will be voting their economic interest comes November and the candidates’ positions on trade will play an important part in the voters’ decision-making.

John McCain made a quick stop in Chicago yesterday to speak to the National Restaurant Association members.  He promised the group that they would fare better under his administration than under either Barack Obama or Hillary Clinton administration.
“Your plans for growth and their plans for taxes are going to be hard to square, because you can’t raise taxes by a trillion dollars without hurting American workers,” said McCain.

McCain singled out Obama specifically for his expressed views on trade.  McCain insisted that criticizing U.S. trade policy as Obama has done “plays on fears of foreign trade” marking Obama as the politician who practices “old-style politics.”  At the same time, Senator McCain did acknowledge that global trade comes at a cost and vowed to expand and improve federal aid for displaced workers.

McCain said U.S. exports and trade agreements create jobs and income that otherwise would not exist.  He also said that “Senator Obama has a habit of talking down the value of our exports and trade agreements. He even proposed a unilateral re-negotiation of NAFTA - our agreement with Canada and Mexico that accounts for 33 percent of American exports, and 17 billion dollars’ worth of exports last year just for Illinois.”

Surely, Senator McCain realizes that exports are only one half of the trade story and no serious discussion can omit the fact that we import much more from our trading partners, including NAFTA countries, than we sell to them.  The U.S. Census Bureau indicates that in 2007 alone our trade deficit with Canada and Mexico was almost $139 billion.  Our trade deficit with China was nearly twice that, at over $256 billion.

Omitting half the truth, Senator McCain?  That certainly sounds like the “old-style politics” to us.

John McCain got his crystal ball out yesterday to outline what he will have achieved as President by the year 2013 in a speech in Columbus, Ohio. 

Predictably, the first “achievements” are in the area of the National Security, important, but not the number one issue for the voters anymore, as polls indicate.  But not to worry, John McCain predicts “several years of robust economic growth” as well, brought about by (what else?) a “reduction in the corporate tax rate from the second highest in the world to one on par with our trading partners.” McCain did say that he would eliminate “tax loopholes” and “corporate welfare,” and that would encourage companies “to keep their operations and jobs in the United States.”

John McCain’s 2013 administration has blissfully ratified new free trade agreements that lead to “substantial increases in both exports and imports.”  However, Americans who “lost jobs in the global economy they once believed were theirs for life, are assisted by reformed unemployment insurance and worker retraining programs.”  McCain is concerned about the older workers who accept lower paying jobs: he wants them to “acquire new skills” while they are “provided assistance to make up a good part of the income they have lost.

Barack Obama returned to Michigan to campaign here with an eye on the general election.  Obama visited Macomb Country and toured the Chrysler Stamping Plant in Sterling Heights.  The symbol of America’s manufacturing strength for the better part of the 20th century, Michigan’s auto industry has been struggling to stay profitable and relevant in the era of outsourcing and rising oil prices.  The state served as a perfect backdrop for Barack Obama to unveil his Manufacturing Agenda that outlines his priorities for this crucially important sector of our economy.

Obama began by acknowledging the struggles of the industry.  The auto industry lost 300,000 jobs in the past eight years - about a third of which were lost in Michigan.  “That’s hundreds of thousands of workers who will no longer be able to count on a paycheck to pay the rising costs of health care and college; gas and groceries,” said the candidate. Obama noted that manufacturing supports one in six American jobs, and that we’ve lost nearly 4 million of them in the last eight years.

Here are the main initiatives of the manufacturing agenda that Barack Obama highlighted in his speech:

• $150 billion investment in “green energy sector” that will create “up to five million” new green jobs in the U.S.;
• 10 billion a year investment in Clean Technologies Deployment Venture Capital Fund that will assist with bringing breakthrough technologies invented in America to production also here in America;
• Advanced Manufacturing Fund to invest in “innovation and job creation in places that have been hard hit by the decline in manufacturing”;
• Double the funding for the Manufacturing Extension Partnership;
• $60 billion infrastructure fund to rebuild highways, bridges, roads, ports, air, and train systems, lower transportation costs for manufacturers and spur job growth in manufacturing;
• Fix the health care crisis and investing in science and math education from kindergarten through graduate school; and
• Reform our trade policy to ensure our workers can compete on a level playing field and to create good jobs at home and real markets for American products abroad.

Obama said that he believes in trade, but we need to make sure t that our workers are competing on a level playing field, and that countries like China aren’t breaking the rules and putting American workers at a disadvantage. “Fighting for our workers isn’t bad for business; it’s good for our economy,” concluded the candidate.  Now, that’s the spirit.

Hillary Clinton is running a new ad in West Virginia.  The state is holding its presidential primary this Tuesday. Clinton’s ad centers on the promise that the candidate will level the playing field for America’s middle class. The ad states that Clinton would end $55 billion dollars in giveaways to corporate special interests and invest in middle class tax cuts and new jobs.The ad also promises that the candidate will get “tough on unfair trade deals and end tax breaks to companies that ship jobs overseas.”

While the Democratic Presidential candidates were battling it out in Indiana and North Carolina, Sen. John McCain had the luxury to take a step back and reflect on long-term goals, like what kind of federal judges he would appoint and what Cinco de Mayo means to him. 

Yesterday, Sen. McCain delivered a speech on “His Vision for Defending the Freedom and Dignity of the World’s Vulnerable” at Oakland University in Rochester, MI.  The crux of his speech was about combating human trafficking around the world that leads to modern-day slavery. 

Human trafficking is a very serious problem. The International Labor Organization (ILO) estimates 12.3 million people can be found in forced labor, bonded labor, forced child labor, and sexual servitude at any given time; other estimates range from 4 million to 27 million.

But apart from saying what interagency changes he’d make when he is President to more effectively fight the problem
of human-trafficking, McCain did not mention why people become victims of this despicable crime in the first place.  The U.S. State Department’s 2007 Trafficking in Persons Report says that the supply of victims is encouraged by “poverty, the attraction of perceived higher standards of living elsewhere, lack of employment opportunities, public and private corruption, organized crime, violence against women and children, discrimination against women, political instability, and armed conflict.”  The same report states that a “significant share of the exploitation in modern-day slavery is linked to the production of products for export.”

The State Department designates China to be on a Tier 2-Watch List as a “source, transit, and destination country for men and women trafficked for the purposes of sexual exploitation and forced labor.” The State Department indicates that in 2007, “China’s efforts to combat trafficking for forced labor remained inadequate.”  Countries like China that rely on cheap labor to produce vast quantities of cheap goods for export take part in the vicious cycle.  We in the U.S. become complacent in the problem when more and more of the products that we consume are made in the nations that lack adequate labor protections.

Hillary Clinton was visiting High Point, North Carolina yesterday.  High Point is a furniture hub and show rooms
dot the streets of the town. “I will get tough on China because what they are doing is not right,” said the Democratic candidate.

Hillary rightfully singled out China for causing the loss of thousands of jobs in NC furniture industry.  A study done for AAM called “Enforcing the Rules” cited the wooden furniture manufacturers in the U.S. among its case studies of various industries affected by the unfair trade with China.

In 2001, the U.S. industry recorded shipments $2.3 billion dollars and employed approximately 33,000 workers.  At the same time, the furniture industry in China started to expand rapidly, with a large share of production targeted toward the U.S. market.  In 2003, the U.S. International Trade Commission investigated the possible dumping of Chinese-made wooden furniture on the U.S. market.

The Commission surveyed the U.S. furniture makers.  Of the 54 U.S. producers from 23 states that responded to the US ITC’s producers’ questionnaire during the investigation of dumped wooden bedroom furniture from China, ten (the most) were headquartered in North Carolina.  The firms responding to the Commission’s questionnaire indicated that between 2001 and 2003, China’s capacity to produce wooden bedroom furniture had doubled, shipments to the U.S. market increased by 147 percent, and exports to the United States accounted for approximately three quarters of these firms’ total shipments. This growth has occurred despite a high incidence of quality problems with Chinese furniture.

Despite the enormous pressure from the Chinese furniture makers and their U.S. distributors, the Commission ruled in 2003, by a vote of 6 – 0, that the U.S. industry was materially injured by dumped imports from China.

The first step to fixing a problem is acknowledging we have a problem.  Hillary Clinton says that she understands the consequences of the unfair trade with China for U.S.industries and communities across the nation.  The next President, whoever he or she may be, must take a serious look at U.S.-China trade relationship and finally take the necessary steps to benefit the American workers.

Hillary Clinton participated in the live TV show, “This week With George Stephanopoulos” in Indianapolis this Sunday.  The show was aired before studio audience, and the members of the audience had an opportunity to ask the candidate questions directly.  There was a question on trade.  Senator Clinton was asked by a voter: “Hillary, Alexander Hamilton said that the key to U.S. supremacy in the world is the manufacturing sector. Sens. Obama and McCain have stated that these manufacturing jobs that we’ve lost cannot be brought back to Indiana or United States. What is your position? Do you agree with Sens. Obama and McCain?” 
 

Well, Indiana’s manufacturing sector has been hard-hit in the last seven years.  Stephanopoulos did preface the question
by saying that Indiana lost 45,000 manufacturing jobs to China in that period of time.  That is true, but he didn’t mention that the total manufacturing job loss in Indiana from 2000 to 2007 was 109,800.

Senator Clinton said that she believed that the declining manufacturing base is a threat to the overall economy.  She continued, “we need to change the tax code to take out any single benefit from your tax dollars that goes to any business that exports a job out of Indiana to any foreign country. It’s outrageous. It’s unpatriotic that is still going on.” The candidate advocated for strong labor and environmental standards in our trade agreements. “if you go to work in Indiana, there are certain rules that the employers have to follow to protect your safety and your health, and there are certain consumer rules,” said Clinton,”but look what’s happening with China. You know, we get lead-laced toys and contaminated pet food and polluted pharmaceuticals, sent back into our market; they get our jobs.”  She specifically singled out the defence industry to say that: “if we are going to have a half-a-trillion defense budget, then I want to see American workers do what is necessary to produce the defense materials and good for our country.”

There were members of the Steelworkers Union in the audience.  These guys got up before dawn to hear the candidate speak about trade and other important issues.  The voters in TV studios and on the campaign trail should remind the candidates that real jobs and real livelihoods are at stake in this election.  What the candidates say matters a great deal to those who are will be voting tomorrow in Indiana and North Carolina.

Hillary Clinton met with the Editorial Board of the Indianapolis Star yesterday.  She talked about the U.S. economic relationship with China at length, emphasizing that it is our national responsibility to hold China accountable. 

The Senator pointed out that “our companies are not competing with individual companies, but with the whole national agenda [of China].”  In Senator Clinton’s view, China’s agenda is to grow its economy as fast as possible without creating political unrest and, eventually, to dominate the world economically and politically.  Clinton added that there’s no question that China manipulates its currency; sends low-quality and unsafe imports to our market; and has a history of counterfeiting, theft of intellectual property, and industrial espionage. 

Hillary Clinton brought up the case of Magnequench, a company in Valparaiso, IN, that was shuttered in 2003 with all equipment and know-how moved to China.  The story was used in one of Clinton ads running in Indiana.  Magnequench used to make magnets for military applications.  Its production capacity along with sensitive military technology is now lost.  Clinton asserted that we allowed cases like Magnequench and others to occur because we haven’t been effectively protecting our own strategic and economic interests vis-à-vis China.

“I’m 100% in favor of free trade, but I’m not in favor of being taken advantage of,” concluded the candidate.  And she promised that “We are not going to stand idly by and lose our standard of living.”   We’ll keep following Senator Clinton’s position on this issue.  Stay tuned for Senator Obama’s view on China issues.