U.S. manufacturers say the economic recovery now underway is gaining momentum but that only half of the nearly three million industrial jobs lost over the past three years of weakness are likely to be restored. The manufacturers also want China to let the market determine the value of its currency.
The National Association of Manufacturers believes the worst of the economic slowdown is over. After three years of hard times, the association says industrial output is rising and that the gains are likely to accelerate. It expects overall U.S. economic growth of four percent during the remainder of this year.
Even though the U.S. economy technically emerged from recession nearly two years ago, the recovery thus far has failed to generate new jobs. The manufacturing sector has been particularly hard hit. But despite recovery the association doesn't expect any net job creation until next year.
Association President Jerry Jasinowski said his top international concern is China, which should further open its market to imports, stop counterfeiting, and above all, stop, as he put it, rigging the value of its currency by linking it at an artificially low rate against the U.S. dollar. "Just moving forward on the exchange rate removes a 30 to 40 percent differential, which is essentially killing American manufacturing and American manufacturing workers," he said. "We can't compete with the low labor [costs] in China if at the same time we have to pay a 30 percent differential on the exchange rate. It's not fair and it's not possible."
Another association official, Frank Vargo, is calling on the Bush administration to aggressively work to complete the free trade agenda of the Doha round of international negotiations. Mr. Vargo wants the Doha round to provide more U.S. access to world markets. "American industrial tariffs, tariffs on goods coming into the United States, are less than two percent. That's really not a trade barrier. It's basically just a speed bump," he said. "But we face tariffs of 10, 20, 30, 40 percent or more in so many countries around the world, the advanced developing countries for example."
The manufacturers support President Bush's tax cuts and at the present time are unconcerned about the huge government budget deficit, which has doubled in just the past year.