US pays a heavy price for short-sighted protectionism

After the financial crisis, the swift recovery of China's exports sparked jealousy from some Western countries. China's commodities become the biggest victim of US anti-dumping and anti-subsidy policies.

Some Americans have instigated anti-dumping measures toward Chinese products. A few of them do not understand China's national situation at all, whereas others purposely seek to set non-tariff barriers to US trade with China.

In 2009, trade remedy cases around China involved a total of $12.7 billion. Cases launched by the US made up $7 billion of the total.

The US levied high anti-dumping taxes on China's tires, wire trays and other goods. The protectionist actions shielded the jobs in a limited range of in-dustries, but harmed the interests of workers in downstream industries in the US.

According to a report released by the US International Trade Commission, in 1991, if the US hadn't had levied anti-dumping and anti-subsidy taxes, the nation would have earned an extra net income of $1.59 billion, 0.03 percent of the GDP for that year.

In the same year, the US successfully safeguarded the jobs of 6,477 workers. This means that the US had to pay $245,000 to guarantee a domestic job. The abuse of anti-dumping and anti-subsidy policies harms the interests of both the US and other countries.

The fundamental reason why Chinese products are filling at the price is that China has cheap and diligent labor.

Nobel Laureate Paul Krugman said in 2009 that the average wage of Chinese workers was 4 percent of the US level, and was equal to the South Korean level in 1975. Even wages of Mexican workers were three times the Chinese level. This helps build the competitiveness of Chinese products.

"Made-in-China" products have benefited global consumers. According to statistics from the US Department of Labor, the retail prices of US goods have dropped as a result of imports from China. The first pair of shoes owned by many poor people in developing countries was made in China.

History has proved that a nation in which anti-dumping is abused often has problems in its own economic operation. At the moment, some US companies are afraid of competition and try to survive through abnormal protection by the government.

In order to transfer the effects of the crisis, trade protectionism has gained some momentum.

Since Barack Obama took the office, the US government has launched at least 10 anti-dumping and anti-subsidy investigations toward China.

For instance, on November 9, 2009, the US Department of Commerce declared to levy anti-subsidy taxes of 2 to 438 percent on steel wire decking imported from China. However, on January 5, 2010, it also initially decided to levy anti-dumping taxes of 43 to 289 percent on this product.

Meanwhile, the US ignores the fact that the prices of most Chinese products are decided by the market and adopts discriminative surrogate prices and external standards, which leads to severe excesses.

Globalization is a one-way street, and the US has gained huge benefits from it.

Statistics from the World Bank show that China's exports to the US save the latter about $100 billion each year, which is way beyond US benefits from practicing anti-dumping toward China.

The US should carefully consider issues of anti-dumping and anti-subsidy, rather than complain about them. It should reflect on why its own products are so expensive, in-stead of complaining why Chinese goods are so cheap.

Trade protectionism, which benefits nobody, shouldn't become a long-term tactic of the US.

The author is a professor at the Department of International Economics and Trade in the School of Economics, Xiamen University. The article is the fourth of a series of seven comments on Sino-US trade conflicts. forum@ globaltimes.com.cn