International trade and offshore manufacturing took center stage Tuesday night in the second presidential debate between President Barack Obama and Republican challenger Mitt Romney.
Both candidates said their job-promotion efforts would include fielding policies that give incentives to domestic manufacturers to keep factories in the United States rather than relocate them in low-wage countries. Obama also took issue with Romney's claims that he would be tougher on other countries like China that used unfair trade practices to give their imports an advantage over products made by American companies.
During the town hall-style debate, Romney said he wanted to lower corporate tax rates and reduce regulations to make it more attractive for companies to produce at home, while the president reiterated that he wants to eliminate tax breaks for companies that invest in plants overseas and reward those that expand domestically.
|Romney and Obama
Romney said one way he would reverse the outsourcing trend would be to crack down on China for artificially suppressing the value of its currency to make their products cheaper relative to those in other countries, which he blamed Obama for not doing.
"On day one, I will label China a currency manipulator, which will allow me as president to be able to put in place, if necessary, tariffs where I believe that they are taking unfair advantage of our manufacturers. So, we're going to make sure that people we trade with around the world play by the rules," he said.
Many experts, including Henry Kissinger, have said that openly challenging China about its currency is a dangerous, double-edged sword that could spark a trade war and undermine efforts to get Chinese cooperation on a host of difficult issues such as North Korea's nuclear ambitions, global warming and disputes over islands in the South China Sea. China is also the third-largest U.S. export market and U.S. export growth in China is growing rapidly.
The Associated Press
recently noted in an article about the campaign that no president in 18 years has labeled any country a currency manipulator.
The Obama administration has preferred to work behind the scenes to get China to have its currency float in the global marketplace and recently postponed an upcoming report on China's progress on currency policy until after the election.
Obama said China's currency has actually gone up in value by 11 percent since he took office and he took credit for putting trade pressure on China that has contributed to a rise in U.S. exports.
Obama pointed out he slapped antidumping duties on cheap Chinese tires that saved 1,000 jobs, but that Romney accused him at the time of being protectionist. He also touted the creation early this year of an interagency trade enforcement unit to go after violators of U.S. trade rights and that his administration has brought twice as many cases of unfair trading practices before the World Trade Organization than the Republican Bush administration.
He also went after Romney's private sector record of offshoring many U.S. factories to China while heading private equity firm Bain & Co.
"When he talks about getting tough on China, keep in mind that Gov. Romney invested in companies that were pioneers of outsourcing to China and is currently investing in companies that are building surveillance equipment for China to spy on its own folks. Governor, you're the last person who's going to get tough on China," Obama said.
Asked how they would convince a company like Apple to bring back manufacturing to the United States, Romney said: "The answer is very straightforward. We can compete with anyone in the world as long as the playing field is level. China's been cheating over the years. One by holding down the value of their currency. Number two, by stealing our intellectual property; our designs, our patents, our technology. There's even an Apple store in China that's a counterfeit Apple store, selling counterfeit goods. They hack into our computers. We will have to have people play on a fair basis, that's number one."
"There are some jobs that are not going to comeback," Obama responded, "because they are low wage, low skill jobs. I want high wage, high skill jobs. That's why we have to emphasize manufacturing. That's why we have to invest in advanced manufacturing. That's why we've got to make sure that we've got the best science and research in the world. And when we talk about deficits, if we're adding to our deficit for tax cuts for folks who don't need them, and we're cutting investments in research and science that will create the next Apple, create the next new innovation that will sell products around the world, we will lose that race.
"If we're not training engineers to make sure that they are equipped here in this country. Then companies won't come here. Those investments are what's going to help to make sure that we continue to lead this world economy, not just next year, but 10 years from now, 50 years from now, 100 years from now."
The candidates also sparred over trade. Romney said he would pursue more free trade agreements around the world, especially in Latin America. Obama said the administration has made great progress towards its goal of doubling exports within five years with the help of three trade deals that ensure fair treatment for U.S. exporters and manufacturers. - Eric Kulisch