From The Editor: Trade And Politics

From The Editor

Trade And PoliticsAs the 2004 U.S. presidential election campaign picks up speed,
international trade issues are sure to follow terrorism and the sagging U.S. economy to take up a
front-and-center spot in debates and media commentary in the country.In the United States, where
2.7 million manufacturing jobs disappeared in the past two years, many believe, at least in part,
an undervalued Chinese yuan is to be blamed because it makes it impossible for U.S.-made goods to
compete with Chinese imports, including textile products.When George W. Bush sent Treasury
Secretary John Snow to Asia to meet with his counterparts in early September, part of Snow’s
mission was to convince Asian economies, especially China, to revalue their currencies. However,
the Asia-Pacific Economic Cooperation’s (APEC) response was luke warm at best. China politely but
firmly told the U.S. it will allow a market-driven exchange rate when the time comes — and the time
is not now.Feeling such heat, will Bush be pushed into installing other trade barriers? Most likely
not, especially against China because of the role China plays in dealing with North Korea, not to
mention the millions of U.S. dollars China holds in its foreign reserves. Most Asian manufacturing
industries can probably still enjoy relatively easy access to the vast U.S. market. But politics
aside, is a market-driven exchange rate such a bad thing? Or for that matter, are living wages,
safe working environments, environmentally sound manufacturing practices, so on and so forth, bad
for business? As Asia becomes more integrated into the global trade community, demands will be made
on the region to resolve these issues, and they will likely be made more frequently than every four
years.By Carmen Pang, Executive

Fall 2003