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ASEAN ANALYSIS  26  August 2010

Learning a hard lesson

By David Swartzentruber
AseanAffairs   26 August 2010

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The Internet news sites were buzzing on Thursday about the United States’ no-show at the Asean Foreign Trade Ministers conference in Hanoi.

The issue is that the position of U.S. ambassador to Asean is open since the appointment of Scott Marciel to be ambassador to Indonesia.

The fallout from the American faux pas is not all that serious as the United States will be hosting an Asean conference in Washington for all 10 of the Asean leaders, including at least at this point in time, Asean’s problem child, Burma. And Asean Secretary General Surin Pitsuwan took pains to mitigate the American absence to the press.

However, the story behind this story is the movement of many American manufacturing jobs, make that middle class and middle income jobs, out of the United States to places such as China and perhaps some of the Asean countries.

Labor has always been a strong backer of the president’s party, the Democrats, and to fulfill their role as the “champion” of the working class, they have advocated a protectionist policy in the American trade relations with “foreigners.”

While Silicon Valley blossomed in to the Information Age, much of the industrial United States was locked into the old formula, failing to realize that the rest of the world could make the same goods at a lower price.

Many of the Japanese firms that started making their autos in the United States became non-union factories. They often located their plants in border and southern states that wanted the jobs but not the unions.

Republic Senator Richard Lugar, a foreign policy expert within the opposition party, has chimed in with a letter to President Obama urging him to fill the Asean ambassadorial position quickly. Filling the Asean ambassador slot could evolve into a “battle royal” in the U.S. Senate Foreign Relations Committee. One gets that sense from Sen. Lugar’s letter.

The hard lesson that the American labor movement never seems to learn is that protectionism is a poor policy. It may seemingly provide temporary relief but it is no cure.

Note the Japanese experience in moving their auto plants to the United States following the wide acceptance of Japanese auto brands by American consumers.

Germany is the most trade-conscious country on the planet and look at its last GDP growth, 2.2 percent with exports up 8.2 percent. Seventy percent of German firms report they have difficulty filling open position.

The appointment of the next U.S. ambassador to Asean is a story to follow.

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