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America Needs to Get a Spine to Stand Up to China: Ex-Sen. Dorgan

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More signs this week that U.S. manufacturing may be on the mend.

Orders of durable goods jumped 2.2 percent in February following a 3.6 percent decline in January and a 3.3 percent increase in December. When orders for goods rise so does production and the need for more workers who sometimes work longer hours.

In a blog post earlier this week Commerce Department Chief Economist Mark Doms showcased the improved orders and shipments data and pointed to a few other positive trends for U.S. manufacturing.

"Manufacturing employment continues to be a bright spot in 2012, and the sector has added 111,000 jobs over the past three months," he writes. "Average weekly hours of manufacturing production workers in February were 41.9, a level not seen since Nov. 1997-Jan. 1998, and excluding those few months, you have to go back to 1945 to see a longer average work week. The fact that average weekly hours are at such a high level may bode well for future employment gains."

Additionally, we learned this week that U.S exports to China surpassed $100 billion for the first time ever in 2011, according to a new report by the U.S. China Business Council. Thirty states now consider China one their top three export markets.

This news comes on the heels of predictions from The Boston Consulting Group, a global management and consulting firm, which last year estimated that $100 billion in goods production could return to U.S. shores in the next decade due to rising labor costs abroad. The creation, or re-creation, of new jobs could improve the unemployment rate by 1.5 percent.

The Daily Ticker's Aaron Task sat down with former Senator Byron Dorgan (D-ND) to discuss the positives trends for jobs and trade in this country. In 2006, Dorgan wrote Take This Job and Ship It in which he took a comprehensive look at U.S. companies exporting U.S. jobs to cheap foreign labor markets, namely China and India, and the dramatic drain the manufacturing shift had on American prosperity. The U.S.-China trade deficit killed nearly 2.8 million U.S. jobs between 2001 to 2010, according to a recent report by the Economic Policy Institute.

So is the trade tide starting to shift?

"Episodically there are some jobs coming back but they get more attention than the larger point of the federal trade deficit" which remains "very very very large," says Dorgan. In 2011 the U.S. trade deficit with China hit an all-time record $295.5 billion, which is the highest level ever recorded with one country.

"What I would like to see are policies that reward companies that produce in America and then get rid of the incentives to have them produce instead in China, which now exist," says Dorgan. "You cannot long remain a world economic power if you don't have world class manufacturing."

The Obama administration has set an ambitious goal of doubling exports by 2015. To make that happen, in addition to helping create more U.S. jobs, the White House has proposed a $2-billion-per-year tax credit to encourage manufacturers to invest in struggling communities.

That is a step in the right direction, but Doran believes more needs to be done in terms of sticking up for our country on the world stage. We need to "keep pressing and pushing the Chinese" to play fair and let its currency, the yuan, appreciate.

But China does not believe the value of its currency has any impact on the U.S. economy, trade or jobs. Chinese President Hu reiterated this view again to President Obama this week when they met in Seoul, asking the White House to end limits on U.S. high tech technology to China.

"I do think we have a lot to do as a leader in the free world to say to other countries with whom we trade we would want fair and reciprocal trade treatment. You need to keep you markets open to our products," he says. "I think we have to have a little bit of nerve and a will and a spine to stand up for our own economic interests."

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