Trade can be free, but can it be balanced?

"US President Donald Trump has declared that America's $500 billion trade deficit with China means that the US is 'down' $500 billion. Apparently, he thinks that trade surplus and deficits amount to profit and loss statements for countries. He could not be more wrong," wrote A Jamal. He gives an example of a developer buying $50 million worth of construction material from China to erect an apartment building. "The $50 million the developer spent in China was exchanged for $50 million worth of goods. That makes it an equal and balanced transaction." "The standard models of trade with which economists work typically yield sharp distributional effects: income losses by certain groups of producers or worker categories are the flip side of the 'gains from trade'. And economist have long known that market failures -- including poorly functional labour markets, knowledge or environmental externalities, and monopolies -- can interfere with the reaping of those gains," wrote Prof D Rodrik. "Nonetheless, economists can be counted on to parrot the wonders of comparative advantage and free trade whenever trade agreements come up." In other words, there are winners and losers. A US government advisory to US companies hoping to export to China said, "Mandatory joint venture structures and equity caps give Chinese partner firms significant control often allowing them to benefit from technology transfer. In addition, the relative opacity of the approval process and the broad discretion granted to authorities foster an environment where the Chinese government can impose deal-specific conditions beyond written legal requirements, often with the intent to force technology transfer as a condition of market access or to support industrial policies and the interests of local competitors." Which means trade is not free and is skewed towards China. Since the US is able to print dollars its trade deficit does not matter, said Jamal. If we take the dollar as a resource for the US, like gold, oil and rare earths are resources of African nations, then wasting dollars in huge trade deficits becomes a resource curse. In 2003, African nations walked out of Cancun conference on free trade, accusing rich nations of negotiating in bad faith. More recently, they blocked talks on rules for digital trade and US demands for free access to internet trade, free flow of data and no customs duty on e-commerce. Just as rich countries exploit the poor, so China exploits richer nations. China is using its wealth from unequal trade to interfere in affairs of other nations. Having been allowed to pervert trade rules blatantly for decades it has become so arrogant that industrialist Jack Ma threatened war if China is not allowed to continue to bend rules. Instead of Trump, perhaps Jamal should address Xi Jinping.