Google, China And The Seafood Trade

Today’s Wall Street Journal has a piece from former U.N. ambassador John Bolton congratulating Google for its decision to fight back against objectionable policies by the Chinese government with respect to intellectual property. Bolton’s piece, excerpted below, makes the case for American businesses – and our government – to vigorously defend our interests in dealing with China, lest the fears of Chinese economic supremacy prove true in a self-fulfilling manner.

The lessons Bolton asks us to draw from the Google-China imbroglio apply to a broad range of issues, one of which hits close to home here in Louisiana.

As Bolton says, the common narrative is to curry as much favor with the Chinese as possible since it’s largely a given that good relations with Beijing will be necessary down the road…

Nonetheless, the lure of China’s market has quieted many complaints by foreign businesses loathe to provoke Beijing or cede such a potentially huge market to competitors, either domestic or foreign. Inevitably, the refrain is that “China will soon be the world’s largest economy,” and firms are simply expected to bite their tongues and plow ahead.

For years, U.S. administrations of both parties have held much the same view. Analysts and “experts” repeatedly advise not to “press too hard” on China on (a) currency manipulation; (b) North Korea’s nuclear-weapons program and proliferation generally; (c) domestic human-rights policy; (d) Tibet; or (e) [fill in the blank] because “China will not be pleased.” Of course, this is a prescription for doing nothing to change undesirable Chinese policies, and indeed implicitly encourages Beijing to continue them.

These widespread strategies of appeasement simply give China what it wants for free. Bringing China appropriately to diplomatic battle on any given issue can hardly be worse than surrendering without a fight, which has occurred all too often in recent years. If fear of retaliation over the immediate issue in dispute—or in a perhaps completely unrelated area—inhibits the U.S. from objecting to unsatisfactory Chinese policies, China will simply proceed to have its way. This analysis is not a criticism of China, which forthrightly does what it can get away with, but of limp-wristed American policy.

Google’s decision to object to Chinese ransacking its e-mail servers, and to threaten a pullout of the Chinese market if satisfaction is not given flies in the face of this trend, Bolton says, and it could result in a victory for American business if the internet search engine firm holds its nerve. He assesses the possible outcomes of the controversy:

China’s advocates make a critical mistake trying to justify the country’s aberrant commercial behavior. Businessman Tang Jun, for example, recently questioned Microsoft’s position against piracy of its intellectual property by telling the Washington Post that “in a lot of other countries that can work. But China is a very unique country.” Unique in saying that stealing intellectual property is the norm in China and must be accepted? Hardly an “open for business” sign or the reputation that any country, no matter how large its market, should want.

Supineness only convinces Beijing that a “take it or leave it” approach will work in more and more circumstances. Here, Google’s conduct in the immediate future is critical: If Google can negotiate satisfactory protections for its operations in China and decides to remain, then its hard line will have proven successful. But if Google cannot get essentially what it wants, and nonetheless remains in China, that will be the worst signal of all. Google must remember never to make threats unless the company is fully prepared to carry them out.

The U.S. government and American businesses should do what they naturally do elsewhere: defend their own interests vigorously. Make deals in or with China when they meet the tests of satisfying those interests, not out of generalized fear of retaliation or lack of cooperation from Beijing down the road. In reality, Beijing is more likely to respect a determined interlocutor, business or government, than a weak-willed one. It is incomprehensible that Americans have not appreciated and acted upon this lesson in recent years. Perhaps Google is about to educate us.

Google’s teachings, assuming the company is able to either win with the Chinese or hold to its threat of pulling out of China, might be quite instructive as the federal government crafts trade policy on Chinese imports – like, for example, with respect to seafood.

For years, Louisiana’s seafood producers have suffered from a Chinese policy of dumping product on the American market in an effort to smother their competition. Louisiana fisheries provide some 30 percent of the American domestic market, so it’s crucial to a domestic industry that a fair and open market can be preserved – and if Chinese seafood can be brought to market more cheaply than can local product, one large part of that equation is the substandard methods of safety and hygiene engaged in by the Chinese aquaculture industry, where only 45 percent of China has any sewage-treatment facilities at all and where products like shrimp and crawfish are being raised largely in waters awash with raw sewage.

Treating this as a free-market issue is philosophically tempting, but Louisiana’s seafood industry adheres to much higher standards of quality by law. If China can access the American market without adhering to such standards, then it’s simply not a level playing field or a particularly free market – and worse, given that the product in question cannot be easily identified by its origins, the consumer often isn’t able to make a choice based on informed preferences. As such, a policy forcing China either to play by the same rules American producers must adhere to, or disengaging with the Chinese trade on seafood, is less about protectionism than about getting the best deal both for American producers and for the consumer as well – particularly given the example of China’s record in importing defective drywall to unsuspecting American homeowners.

That’s why a new piece of legislation – the Imported Seafood Safety Standards Act – introduced by Louisiana Sen. David Vitter and backed by Louisiana Agriculture Commissioner Mike Strain and the Louisiana Shrimp Association, among others, fits into a potentially new paradigm informed by Google’s stance with the Chinese. Vitter’s bill would enhance the safety of seafood imported into the United States by building upon previous legislation preventing the admission into the United States of all seafood products that do not comply with requirements established under the Federal Food, Cosmetic and Drug Act.

“Ensuring the safety of imported seafood products is vital to protecting consumers and the seafood industry in Louisiana,” Vitter said in a statement released today. “Last year, I introduced a bill to prevent ‘port shopping’ and stop importers from attempting to bring in substandard products after first being denied entry at a particular port. This legislation goes even further and includes increased standards to help ensure the quality and safety of imported seafood products.”

Strain echoed the Senator’s sentiments.

“All foreign seafood coming into this country needs to be held to the same standards as that of our domestic seafood industry,” he said. “We know we have safe, quality seafood products that American consumers want, and we are developing a certification program in Louisiana to ensure the public of our commitment. We think that this is the first step of many to protect our American seafood consumers.”

A.J. Fabre, president of the Louisiana Shrimp Association, agreed.

“Given the fact that less than 2 percent of imported seafood is tested upon entry into our country,” he said, “we feel this legislation will add the needed food safety protection for American consumers.”

Vitter’s bill requires increased inspection and testing standards for all imported seafood products and limits imports to designated ports of entry. Further, the bill increases penalties on individuals or organizations that knowingly mislabel products and provides for a ban on certain countries or producers who violate these enhanced standards.

“Our state has a rich fishing heritage that provides many Louisiana families with their livelihoods and is a central component of Louisiana’s unique cuisine,” Vitter added. “Given these traditions, I believe that seafood imported from other countries should be held to the same high standards we place on our own seafood.”

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