“Trade” refers to the sale of things we make in this country, to other countries– and vice versa.
In contrast, offshoring refers to;
- shutting down productive capability in this country,
- re-building that capability offshore, and
- selling things made offshore, back into the American market.
As a case in point, roughly half of U.S. imports from China are actually made by
American companies with offshore production in China.
Paul Craig Roberts served as Assistant Secretary of the Treasury in the Reagan
administration, and has long been an outspoken critic of offshoring.
To paraphrase Roberts, there is nothing in economic theory that says a country
benefits from moving its productive capability offshore.
There’s also nothing in “free trade” theory that addresses the extraordinary
commitment by China to provide incentives for U.S. companies to offshore production.
Along with access to low wage labor, American companies in China benefit from
export subsidies and a currency undervalued by an estimated 40 percent relative to the dollar.
- Officials in the U.S. Treasury have also orchestrated currency devaluation for other low wage
countries throughout Asia.
- The reality is that official policy favors Wall Street financial interests and U.S. multinationals
that profit from offshoring.
- This Wall Street / Trade complex controls trade policy, and profits from low wage labor and
high stock prices for companies with offshore production.
These are the issues SWIFT Act proposals are designed to address.