The Free Thinker

China to the Rescue?

From the AP (hat tip: Greg Mankiw):

Measures in a $789 billion U.S. stimulus package that favor American goods are a "poison" that will hurt efforts solve the financial crisis, an editorial by China's official news agency said.

Provisions in the U.S. stimulus bill approved Friday favoring American steel, iron and manufactured goods for government projects are protectionist measures that could trigger trade disputes, said the editorial issued late Saturday by the Xinhua News Agency.

"History and economics have told us, facing a global financial crisis, trade protectionism is not a solution, but a poison to the solution," the editorial said.

U.S. labor groups that pushed hard for inclusion of the measures have argued that their main purpose is to ensure that U.S. Treasury dollars are used to the fullest extent to support domestic job creation.

China has promised to avoid "Buy China" protectionist measures in its own multibillion-dollar stimulus effort, and appealed to other governments to support free trade. Deputy Commerce Minister Jiang Zengwei said in early February that China would "treat domestic and foreign goods equally so long as we need them."

Protectionism was a key concern of weekend meetings of the Group of Seven industrialized nations in Rome. U.S. Treasury Secretary Timothy Geithner assured G-7 finance ministers on Saturday that the stimulus package would not violate the United States' commitment to free trade.

Xinhua's editorial said protectionist measures taken during the Great Depression of the 1930s caused trade wars, hurting international trade.

President Barack Obama is expected to sign the economic stimulus package on Tuesday in Denver, Colorado.

We used to be the good guys.  How things, as the saying goes, "change."

This is One Way Not to Be Bush/McCain

"Becerra's a bad choice for trade post: He's strongly protectionist, which is the last thing the economy needs right now" (LA Times)

Deep down, we had hoped Barack Obama was fibbing when he bashed the North American Free Trade Agreement on the campaign trail. After all, his senior economic policy advisor had, according to a leaked memo, assured Canadian officials that the talk was "more reflective of political maneuvering than policy." Yet amid reports Thursday that Obama had offered the crucial job of U.S. trade representative to a dyed-in-the-wool protectionist, it seems he was disastrously serious all along.

Rep. Xavier Becerra (D-Los Angeles) could become the administration's point person on international trade. He's a terrible choice, and not just because of a history of unsavory behavior -- such as his successful efforts to win a pardon from President Clinton for convicted cocaine kingpin Carlos Vignali, or the screamingly unethical robo-calls his campaign engineered during his run for Los Angeles mayor in 2001. Becerra is a leader of the Democratic Party's protectionist wing, which opposes NAFTA, the Dominican Republic-Central American Free Trade Agreement and most other trade deals.

Happy now, Economist?