The New York Times has an intriguing article today April26, 2007 on p.C2 about how US Steel, Alcoa, Goodyear and other American manufacturers have formed an ùnusual alliance`with the United Steelworkers aiming to preserve and protect manufacturing in the United States.
Leo Gerard the Canadian President of the Steelworkers is quoted on how in his opinion US business CEOs have not been outspoken enough against unfair trade practices in China because of their fear of negative Chinese reaction which might harm their business interests.
Clyde Prestowicz of the Economic strategy Intitute in Washington argues "that there is a civil war going on between companies that are global producers and those `who are mainly domestically oriented American manufacturers. These companies clash over whether or not free trade agreements benefit financial companies as opposed to business generally and as to whether or not to challenge Chinese trade practices.
This is an important development with implications for Canada US free trade and for global free trade. A possible way out of a potential trade war is discussion over both export quotas and increases in wages in the poorer exporting countries. Some years ago the ILO called for a global minimum wage. This is an excellent idea that deserves further discussion. In the meantime we should expect protectionist pressures to grow in the US.
There can be no doubt that globalization is here to stay . but it needs to be managed much more carefully in the interests of all the stakeholders including workers, consumers and shareholders if it is to thrive. The problem of how to distribute the benefits equitably and ensure that the economic rents from trade flow toward increasing the overall standard of living in the developing countries while not destroying the standard of living in the developed world remains a pressing issue
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