If there are instances of Chinese imports causing injury or death, then the U.S. needs to take strong measures to ensure the safety of products crossing our borders, just as it would with any other country making and exporting defective products to our shores.
Yet we must take special care that our desire for safe goods does not allow the camel to get his nose under the tent for those with a protectionist or anti-business agenda. A few highly publicized incidents does not mean there's an epidemic of tainted or defective goods entering the country -- from China or elsewhere -- and measures to penalize companies expanding overseas or importing goods from such countries may soon be legion.
For example, environmentalists at The Sierra Club are not exactly a business-friendly lot, and news that they have threatened to sue 10 companies over their Chinese imports -- including Target
Certainly, companies have a responsibility to ensure that the products they're selling are safe, but there's also a deeper animus here. Wal-Mart
I wonder, though, whether the environmentalists are as concerned for safety as they are for thwarting trade. It wasn't that long ago that the Sierra Club was opposing the North American Free Trade Agreement (NAFTA) because it would allegedly allow dangerous, pollution-causing Mexican trucks to cross our borders. Yet even with the regulatory schemes that were imposed on that country beyond what was called for by the treaty, both countries have benefited from the increased trade. U.S. exports to Mexico more than doubled -- to $105 billion -- in the first decade of NAFTA's existence.
Whether it's nationalism, protectionism, or even xenophobia, the drive to limit imports from China or other countries can only hurt our own economy. While I have expressed doubts about China's commitment to capitalism, that doesn't mean I believe trade ought to be suppressed. We have a far greater chance to change a country's ways by trading with it than by isolating it.
There will always be those who will fight to keep "American jobs American," but such sloganeering ignores some basic realities of free trade. Think cheap Chinese clothes will put Americans out of work? How about the fact that they're actually made with cotton grown here in the U.S.? More than 19 million bales were exported to China last year. And while China is a net steel exporter, high-quality steel from the U.S. is still in demand and the need for steel in China has kept prices high. China was a net importer of steel for some 25 years; it's only in the past two years or so that it has become an exporter.
In fact, U.S. exports to China grew an amazing 32% in 2006, well ahead of any other export market in the world, while they were up another 16% through the first six months of this year. The U.S. is China's top trading partner, with the value estimated at more than $262 billion. And according to The Wall Street Journal, China is the fastest-growing export market for small U.S. businesses.
Let's keep consumers safe. Let's make sure that our trading partners -- all of them -- maintain safe manufacturing processes. However, let's also ensure that we don't allow a few well-publicized incidents to undermine the benefits of the rich trade environment we enjoy as consumers and investors.
China Mobile is a recommendation of Motley Fool Global Gains. You can join the globe-trotting team as it scours the world's markets looking for the best international investments with a 30-day risk-free trial subscription.Fool contributor Rich Duprey owns shares of Wal-Mart but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. Wal-Mart is a recommendation of Motley Fool Inside Value. RC2 is a recommendation of Motley Fool Hidden Gems. The Motley Fool has a disclosure policy.