False boost for US jobs

IT IS REGRETTABLE THAT THE WORLD TRADE Organization (WTO) Appellate Body has ignored the reality and rejected a Chinese complaint against US protectionist measures against imported Chinese tires.

Worse, the fact-denying ruling may even endanger the growth of global trade by playing into the hands of those US politicians who tout trade protectionism as the silver bullet to fix the stubbornly high US unemployment.

As the global trade watchdog, the WTO is obliged to do its best to keep at bay trade protectionism, which can easily thwart international efforts to lift the world economy out of the doldrums.

Unfortunately, the WTO ruling indicates otherwise.

In 2009, US President Barack Obama imposed punitive duties of 35 percent on tire imports from China, citing damage to the national tire industry. That prompted China to lodge a complaint with the WTO. This was rejected in December, a decision that China then appealed.

On Monday the appellate body rejected China's appeal. But the WTO's rejection of China's arguments flies in the face of the facts.

While US tire imports from China declined by nearly 24 percent in 2010 compared to 2009, and further declined by 6 percent in the first half of 2011, the US' total tire imports increased by more than 20 percent in 2010 compared to 2009 and further increased by 9 percent in the first half of 2011.

Clearly, US consumers buy imported tires that US companies do not produce or cannot produce as cost-effectively as their foreign counterparts do, which is exactly in observance of the WTO's spirit of free trade and globalization.

This simple fact should lay bare the falseness of the US accusation that a surge of tire imports from China was a significant cause of material injury to the US domestic tire industry.

It is a pity that the WTO has once again supported punitive measures that fail to reduce US tire imports but hurt China's legitimate trading interests to accommodate domestic political pressure in the United States.

The worry is that the ill-timed ruling will be exploited by some US politicians to justify more protectionist measures at a moment when the world economy is on the brink of a double-dip recession.

US Trade Representative Ron Kirk called the ruling a "tremendous victory" for US workers, and Republican presidential hopeful Mitt Romney vowed to get tough on China to cure the US' unemployment woes.

Any advocate of free trade and globalization should know that protectionism will neither save nor create jobs for the US.

If the WTO is to make good use of its mandate, it should stand firm against protectionism.

That is the message that the WTO should send.