7.04.2007

Ross Robson Interview, Part 2: The Need for Fair Trade

Add Ross Robson to the list business leaders who believe that government action is needed to ensure fair trade for American manufacturers.


            Ross, who is retiring as executive director of the Shingo Prize, had some strong words for the federal government when I spoke with him recently.


            “President Bush, in free trade policies for six or seven years, has done nothing to ensure it’s a level playing field. Congress has done very little,” he said. “The issue of fair trade vs. free trade is critical to the success of manufacturing in the U.S. The current administration has basically been blind to the issue of fair trade.”


            Ross was referring specifically to alleged undervaluation of the yuan, the currency of China. Based on estimates from a variety of sources, he believes the yuan may be undervalued by anywhere from 25 percent to 50 percent.


            “The issue of fair trade showed up rather clearly in the congressional elections. All newly elected or re-elected Democrats had campaigned for fair trade, not just free trade,” he said. “We’ve clearly got to right-size that global marketplace and ensure free trade around the world. I see nothing in the horizon suggesting that’s going to occur in the next few months.”


            On its face, fair trade may not sound like a lean issue. However, my impression is that most lean advocates are almost inherently supporters of free trade. We argue that you don’t need to outsource materials or production to compete with low-wage foreign producers; that you can compete successfully in a global marketplace if a lean strategy drives your operations.


            That becomes more challenging when the marketplace is distorted by undervaluation of currencies and/or government subsidies of foreign businesses. So if we want people to truly see what lean can do, we need the level playing field that comes from fair trade.


 

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