Capitalism with a decidedly devious Chinese twist is the latest abuse of international trade rules committed by the Communist government of mainland China.
While we are not surprised — Red China is hardly the entrepreneurial paradise it purports to be — we are happy that the United States government is not taking Chinese cheating laying down. And it’s not an abstract issue for Louisiana, given the competition our fisheries face.
“Unfairly subsidized shrimp imports threaten the historic Gulf shrimp industry that supports thousands of Louisiana families,” said U.S. Rep. Charles Boustany, of Lafayette, at an Obama administration trade event.
That a leading Republican member of the House graces one of the Obama administration’s events is, we believe, a very good sign. The issues of fair trade — competition carried out under the rules of the World Trade Organization — should be of concern to both parties in this country.
U.S. Trade Representative Michael Froman has called for consultations with the Chinese government over subsidies of its exporters, to the tune of more than $1 billion through “demonstration bases,” or clusters of government-pushed businesses.
Consultations are the first step under WTO rules toward a formal complaint. And one can hardly doubt that the Chinese government will defend its practices, so this may well be a case that the Gulf of Mexico’s shrimpers will be watching for a while.
“Export subsidies provide an unfair advantage to a vast array of Chinese exporters and are expressly prohibited under WTO rules,” the USTR office reported. “Due to China’s lack of transparency, it is difficult to assess the exact extent of the subsidies provided to enterprises in each of the 179 Demonstration Bases in China.”
What is certain is that the Chinese businesses favored by the government are significant exporters, consistent with the USTR view that these are the outlets for goods getting illegal subsidies. Six of the 10 “demonstration bases” specializing in seafood production accounted for 20 percent of China’s seafood exports, USTR reported.
We are all for more international trade, and we applaud the Obama administration and members of Congress — including Boustany and other members of the Louisiana delegation, of both parties — for pushing for new trade agreements.
Trade is vital to Louisiana’s economy. In 2014, Louisiana exported a record $65.1 billion in goods to the world, including $45.9 billion of manufactured products. That supports thousands of jobs.
But the reason that WTO rules exist is to ensure that international businesses compete on a level playing field, and it’s vital to the cause of freer trade that the U.S. government continue its efforts to ensure fair trade.
One success recently has been a WTO ruling on Chinese discrimination against imports of American cars and trucks. The fair trade issues are important to big unionized businesses like automobile manufacturers, and small independent businesses like Louisiana shrimp boats.