Trade Agreement is Great -- For China

You can expect Robin Hayes to be crowing tomorrow about a trade agreement with China that his office helped write. The deal limits the increase each year that China's textile exports to the US can increase. The good Representative's been involved in the negotiations because his district—North Carolina's 8th—has been hard hit by textile competition from China.

Here's what Hayes won't tell you: The trade agreement gives much more to China than it saves for North Carolina.

China entered the WTO under an understanding that if there were to be a supply spike, other WTO members could cap the growth of imports from China at 7.5% per year. Well, right now there's a supply spike. But the new trade agreement is an even worse deal for North Carolina workers than the already-agreed-on 7.5% cap.

The agreement that Hayes will be talking up tomorrow covers 34 categories of textile and clothes. Growth in some of these categories—fewer than half of them—will be below the 7.5% cap for only one year, but will then exceed the cap and keep on increasing. Growth in the rest of the categories will remain in the double digits. All of these increases sit on top of the 50% increase in Chinese textile exports to the US in 2005 (so far).

China is supposed to sign this new deal in a few hours, and they'd be fools not to. If they played by the old rules, they'd be subject to a 7.5% limit on export increases. The new rules allow them much more room to grow. Remember this when you hear Robin Hayes talk about his valiant efforts to protect North Carolina jobs.