Jo Ann Emerson, July 16, 2005

The national trade deficit is a growing and dangerous liability for the U.S. economy. At $62 billion for April 2005, it represents an incredible shortfall of American exports against imports from around the globe. With a strong domestic economy, low national unemployment at 5 percent, and increasing retail sales, the picture should look rosy.

But one look at the trade deficit changes all of that.

America’s largest trade deficit is with China, a nation that enjoys Permanent Normal Trade Relations with the U.S. and ties its currency to the dollar to make it a more competitive trading partner. From March to April of 2005 our trade deficit with China increased a whopping $1.8 billion -- raising our total trade deficit with China to over $18 billion for just one month. As the U.S. trade deficit, and the portion of that deficit attributed to China, continue to grow, our own economy is at risk of losing its reputation as a leader in world trade.

China is not only formidable, it is also aggressively building its own economic infrastructure. In cities, urbanization and industrialization are occurring at a rapid rate. In rural areas, resources and agriculture are being sapped to support the expansion (planned by communist leaders). While urban areas develop and accumulate wealth, income and quality of life in rural China are declining, according to the World Bank. Just a few years from now, China will rival the U.S. and the European Union in global market power. It already has surpassed us in population. In the U.S., we cannot allow our competitiveness to suffer, and neither must we forget about the resources and the resourcefulness of rural America.

In fact, our greatest competitive advantage may prove to be the strong agricultural and manufacturing base in rural America, the proud, skilled and knowledgeable workforce, and a growing effort to stop a "brain drain" to urban areas. In Congress, we have an obligation to keep the advantages we have over nations like China and hone our skills at international trade.

Another reason the economic outlook is less certain than we would like is the high and unstable price of oil. Here, again, China is a player on the world market and a growing adversary as the world second-largest consumer of petroleum products. As the world’s leading consumer of oil, the U.S. must protect this resource by using all of the resources available to us here at home.

Energy alternatives such as ethanol and biodiesel, again from rural America, will prove to be a strength. But we must also build ethanol refineries and vastly reduce American dependence on foreign sources of oil.

In order to preserve American access to gasoline supplies, I voted in the U.S. House of Representatives to block a potential takeover of the U.S. oil-refining company UNOCAL by a Chinese company which is 70 percent controlled by the communist government. Even though much of UNOCAL’s activities take place in Asia now, Chinese control could mean that the oil inputs UNOCAL buys would tighten world supplies and result in higher U.S. prices set by the Chinese. Already, China has undermined U.S. foreign policy in efforts to gain access to oil resources in Iran and Sudan. We simply cannot separate the political and economic values of oil.

America won the Cold War by protecting our strategic resources from the threat of foreign control. We must bring the same attitude to our trade relationship with China. I fully support efforts, for example, to eliminate ties between U.S. and Chinese currencies. We must also keep our leverage in specific world markets, specifically trade in cotton goods, which constitute a major U.S. import from China. This is the case despite the fact that America is second in the world in cotton production, much of which is grown here in Southern Missouri. We once were first, and you will never guess who passed us by... yes, China.

A key U.S. initiative in this trade war must be to develop reliable trading partners in the world. As we seek new markets for Southern Missouri agriculture and manufactured goods, our local economy will continue to grow. All those trucks and barges that carry our goods to port are vital connections to the only force which can balance our trade deficit: export. And we must keep doing what we do best if we are going to get America out of the red.

Congresswoman Jo Ann Emerson represents the 8th Congressional District of Missouri. She serves on the House Appropriations Committee.