January 11, 2012
This point would have been worth making in an NYT article on Treasury Secretary Timothy Geithner’s trip to China. The article notes that Geithner will likely try to prod China to raise the value of its currency against the dollar. It also reports that:
“American corporations in industries like telecommunications and financial services have increasingly complained that China continues to restrict their access to domestic markets, despite pledges of openness when China joined the World Trade Organization a decade ago.”
Insofar as Geithner makes a priority of pushing for increased market access for the financial and telecommunications industry it will almost certainly mean less progress on raising the value of the yuan against the dollar. The United States is not in a position to simply dictate conditions to China, so getting more concessions in one area almost certainly means getting fewer concessions in other areas.
This means that if Geithner succeeds in getting concessions from China on market access for financial and telecommunications firms, it will likely be at the expense of achieving more progress on lowering the dollar against the yuan. This would mean in effect that he will have placed the interest of these industries ahead of the interest of U.S. manufacturing workers, since we could potentially gain millions of manufacturing jobs from a lower valued dollar.
This trade-off should have been made clearer in the article.
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