China Negotiates Settlement. The US Negotiates?

The US and Mexico have never really seen eye to eye when it comes to building walls. Yet when it comes to the Great Wall, these two unlikely allies did find common ground: A common foe.

According to AFP: The US-Mexico complaint at the Geneva-based WTO alleged China was maintaining several subsidy programs prohibited under the international institution's rules across a spectrum of industrial sectors in China including steel, wood products and information technology.

Schwab said the 12 illegal subsidies distort the playing field for US-produced goods sold in the United States, China and third-country markets. Many of the subsidies are tax breaks that are available to benefit up to 60 percent of China's exports.

She said she could not quantify the amount of benefits that would be gained by their elimination but said they were "very substantial because the subsidies were so pervasive."

Two types of Chinese subsidies are affected: export subsidies, which give Chinese goods an advantage abroad, and import substitution subsidies, which encourage companies in China to purchase Chinese-made goods instead of imports...

Though all parties agree that this is good news, how good the news is depends on who is in your PAC or who your pack pays.

The administration was thrilled to directly release news of the settlement itself, instead of allowing it to trickle out through the outlets like the endless stream of bad news on Iraq. Trade Representative Schwab was quick to brag on the how the "lengthy negotiations and showed the policy of dialogue and enforcement of the Republican administration of President George W. Bush was working."

Democrats and labor unions were quick to point to the ever widening trade gap, the undervalued Yuan, the remaining WTO complaints and a laundry list of issues that normally arise when the issue of China arises.

According to the NYT,the New York Democrat and long time critic Senator Charles Schumer said the agreement was “a small step on the long road toward playing more fairly” in trade.

There are three things that stand out. Not even staunch critics like Schumer said that the settlement was bad. The main criticism is that it was good, but not good enough. Second, since when did Mexico and the US agree on anything? The fact that China, Mexico and the US enter into the same news event with NO strained parallel between the Great Wall and the proposed wall between the US and Mexico is a miracle. OK, I ruined that, but I don't count.

Finally, since when does the administration negotiate? This is a bad precedent for repeated Bush administration claims that negotiations tend to be useless and "hard lines in the sand" send a clear policy message. I would recommend that the US create a coalition of the willing with Mexico ASAP and invade China. And they should do so now; quick before China takes away the subsidies on it's own. This way it will look like force and only raw force was able to achieve the administration's agenda. We can let Mexico take northern China and the US can take the South. They are more practiced at getting over walls - a fact which is the unspoken subsidy in the US agricultural pricing.