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1,028 US economists urge no protectionist against China

(Xinhua)
Updated: 2007-08-02 15:02

More than 1,000 top American economists have signed a petition to urge Congress not to impose protectionist measures against China, saying such a move would hurt the US.

The petition, sponsored by the Club for Growth, was signed by a total of 1,028 economists from all 50 states and top universities.

In addition to many other prominent and well-respected economists, signatories include Nobel laureates Finn Kydland, Edward Prescott, Thomas Schelling and Vernon Smith.

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The economists said in the petition that China currently supplies American consumers with inexpensive goods and low-interest rate loans and retaliatory tariffs on China "are tantamount to taxing ourselves as a punishment."

"Worse, such a move will likely encourage China to impose its own tariffs, increasing the possibility of a futile and harmful trade war. American consumers and businesses would pay the price for this senseless war through higher prices, worse jobs, and reduced economic growth," they warned.

"As economists, we understand the vital and beneficial role that free trade plays in the world economy. Conversely, we believethat barriers to free trade destroy wealth and benefit no one in the long run," they said. "Because of these fundamental economic principles, we sign this letter to advise Congress against imposing retaliatory trade measures against China."

The economists said trade between the US and China is mutually beneficial. Government data shows that total trade between the two countries has soared from US$116 billion in 2000 to almost US$343 billion in 2006. That's an average growth rate of almost 20 percent a year.

"This marvelous growth has led to more affordable goods, higher productivity, strong job growth, and a higher standard of living for both countries," said the signatories. "These economic benefits were made possible in large part because both China and the United States embraced freer trade."

"We urge Congress to discard any plans for increased protectionism, and instead urge lawmakers to work towards fostering stronger global economic ties through free trade," they concluded.

The economists expressed serious concerns about the recent protectionist sentiments expressed in Congress, which on Wednesday passed a bill in the Senate banking committee that would make it harder for the Treasury to avoid a finding that China and other countries have "misaligned currencies."

Last week, the Senate Financial Committee passed another bill that would allow the US government to push other nations to adopt more market-based currency policies or face sanctions.


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