• $25
  • $50
  • $100
  • other
  • use Paypal

CALLING ALL COUNTERPUNCHERS! CounterPunch’s website is one of the last common spaces on the Internet. We are supported almost entirely by the subscribers to the print edition of our magazine and by one-out-of-every-1000 readers of the site. We aren’t on the receiving end of six-figure grants from big foundations. George Soros doesn’t have us on retainer. We don’t sell tickets on cruise liners to the “new” Cuba. We don’t clog our site with deceptive corporate ads or click bait. Unlike many other indy media sites, we don’t shake you down for money every month … or even every quarter. We ask only once a year. But when we ask, we mean it. So over the next few weeks we are requesting your financial support. Keep CounterPunch free, fierce and independent by donating today by credit card through our secure online server, via PayPal or by calling 1(800) 840-3683.


We Didn’t Offshore Manufacturing?


Is an iPhone made in China and exported to Europe a U.S. export?

Is an Apple executive a manufacturing worker?

Yes, and yes.  At least those could become the answers if a new proposal afoot among some in the administration is allowed to take effect.  Federal agencies grouped under the bland-sounding Economic Classification Policy Committee (ECPC) are proposing to radically redefine U.S. manufacturing and trade statistics.

Under the proposal, U.S. firms that have offshored their production abroad – like Apple – would become “factoryless goods” manufacturers.  The foreign factories that actually manufacture the goods – like the notorious iPhone-producing Foxconn factories in China – would no longer be manufacturers, but “service” providers for the rebranded “manufacturing” firms like Apple.

It appears the administration has been reading Orwell.

But the problem with this proposed redefinition is not merely that it offends common sense.  The “factoryless goods” proposal would deceptively deflate the size of reported, but not actual, U.S. manufacturing trade deficits, while artificially inflating the number of U.S. manufacturing jobs overnight.

While some details of the proposal remain open-ended, one thing is clear: this maneuver would obscure the erosion of U.S. manufacturing.  It would disguise the mass-offshoring of U.S. middle-class factory jobs incentivized by NAFTA-style trade deals.  It would undermine efforts to change the unfair trade and other policies that have led to such decline.

To boost U.S. manufacturing jobs and production, we need to switch our policies, not our numbers.

The ECPC is accepting comments on their “factoryless goods” proposal until July 21.  If you’d care to offer your thoughts, click here.
The 3 Big Distortions of the “Factoryless Goods” Proposal
1.  The proposal would result in a fabricated reduction of the U.S. manufacturing trade deficit by rebranding imports of U.S. manufactured goods as “services” imports, according to recent explanations offered by officials of ECPC member agencies.  The redefinition would not affect all U.S. trade statistics, but it would distort some of the most widely-reported numbers (those calculated on a balance of payments basis), misleading the public and policymakers alike.

Take, for example, a scenario in which Apple ships iPhone parts to China to be assembled in a Foxconn factory and then sent back to the United States to be sold here.  Currently, the value of the imported iPhone minus the lesser value of the exported parts counts as a net U.S. import of a manufactured good.  This reflects the fact that Apple offshored its iPhone manufacturing to China.

But under the ECPC proposal, Foxconn, now called a “manufacturing services provider,” would not be described as having manufactured the iPhones but as having provided services to Apple.  As a result, the net U.S. import of manufactured goods resulting from Apple’s decision to offshore would be reduced. In its place would be an import of Foxconn’s factory “services.”
2.  The proposal would treat some goods exported by foreign factories asU.S. manufactured exports.  Take a scenario in which Apple ships iPhone parts to China that are assembled by Foxconn and then shipped to the European Union (EU).  Currently, Apple’s export of parts to China counts as the only U.S. export in this scenario.

But the ECPC proposal, according to officials of ECPC member agencies, would instead count China’s export of the fully-assembled iPhones to the EU, less the cost of any imported parts, as a “U.S. manufactured goods export.”

The absurd logic of this rebranding is that while China manufactured and exported the iPhones, they count as U.S. manufactured exports because they were under the control of a U.S. brand.  This Orwellian proposal would spell an artificial increase in U.S. manufactured exports (on a balance of payments basis), further belying the real U.S. manufacturing trade deficit.
3.  The proposal would spur a disingenuous, overnight increase in the number of U.S. “manufacturing” jobs as white-collar employees in firms like Apple – now rebranded as “factoryless goods producers” – would suddenly be counted as “manufacturing” workers.

This change would also create a false increase in manufacturing wages, as many of the newly-counted “manufacturing” jobs would be designers, programmers and brand managers at “factoryless goods producers” like Apple.

Reported U.S. manufacturing output would also abruptly and errantly jump, as revenues from firms like Apple would be lumped in with the output of actual manufacturers.
This proposal defies common sense.  It would dramatically distort U.S. trade, labor and gross domestic product statistics.  Goods manufactured abroad and imported into the United States are not something other than manufactured goods imports.  Goods exported from foreign factories do not become “U.S. exports” when they are produced for U.S. brands.  And jobs in which workers spend zero time actually manufacturing anything are not “manufacturing jobs.”

The offshoring of U.S. manufacturing under years of unfair trade policies cannot be undone with a data trick.  The hoped-for “renaissance” of U.S. manufacturing will come through new policymaking informed by accurate data, not politically convenient distortions.

Ben Beachy is the Research Director for Public Citizen’s Global Trade Watch.

October 12, 2015
Ralph Nader
Imperial Failure: Lessons From Afghanistan and Iraq
Ishmael Reed
Want a Renewal? Rid Your City of Blacks
Thomas S. Harrington
US Caught Faking It in Syria
Victor Grossman
Scenes From a Wonderful Parade Against the TPP
Luciana Bohne
Where Are You When We Need You, Jean-Paul Sartre?
Kevin Zeese - Margaret Flowers
The US Way of War: From Columbus to Kunduz
Paul Craig Roberts
A Decisive Shift in the Balance of Power
Justus Links
Turkey’s Tiananmen in Context
Ray McGovern
Faux Neutrality: How CNN Shapes Political Debate
William Manson
Things R Us: How Venture Capitalists Feed the Fetishism of Technology
Norman Pollack
The “Apologies”: A Note On Usage
Steve Horn
Cops Called on Reporter Who Asked About Climate at Oil & Gas Convention
Javan Briggs
The Browning of California: the Water is Ours!
Dave Randle
The BBC and the Licence Fee
Andrew Stewart
Elvis Has Left the Building: a Reply to Slavoj Žižek
Nicolás Cabrera
Resisting Columbus: the Movement to Change October 12th Holiday is Rooted in History
Weekend Edition
October 9-11, 2015
David Price – Roberto J. González
The Use and Abuse of Culture (and Children): The Human Terrain System’s Rationalization of Pedophilia in Afghanistan
Mike Whitney
Putin’s “Endgame” in Syria
Jason Hribal
The Tilikum Effect and the Downfall of SeaWorld
Gary Leupp
The Six Most Disastrous Interventions of the 21st Century
Andrew Levine
In Syria, Obama is Playing a Losing Game
Louis Proyect
The End of Academic Freedom in America: the Case of Steven Salaita
Rob Urie
Democrats, Neoliberalism and the TPP
Ismael Hossein-Zadeh
The Bully Recalibrates: U.S. Signals Policy Shift in Syria
Brian Cloughley
Hospital Slaughter and the US/NATO Propaganda Machine
Paul Street
Hope in Abandonment: Cuba, Detroit, and Earth-Scientific Socialism
John Walsh
For Vietnam: Artemisinin From China, Agent Orange From America
Hadi Kobaysi
How The US Uses (Takfiri) Extremists
John Wight
No Moral High Ground for the West on Syria
Robert Fantina
Canadian Universities vs. Israeli Apartheid
Conn Hallinan
Portugal: Europe’s Left Batting 1000
John Feffer
Mouths Wide Shut: Obama’s War on Whistleblowers
Paul Craig Roberts
The Impulsiveness of US Power
Ron Jacobs
The Murderer as American Hero
Alex Nunns
“A Movement Looking for a Home”: the Meaning of Jeremy Corbyn
Andre Vltchek
Stop Millions of Western Immigrants!
Philippe Marlière
Class Struggle at Air France
Halima Hatimy
#BlackLivesMatter: Black Liberation or Black Liberal Distraction?
Binoy Kampmark
Waiting in Vain for Moderation: Syria, Russia and Washington’s Problem
Paul Edwards
Empire of Disaster
Xanthe Hall
Nuclear Madness: NATO’s WMD ‘Sharing’ Must End
Margaret Knapke
These Salvadoran Women Went to Prison for Suffering Miscarriages
Uri Avnery
Abbas: the Leader Without Glory
Michael Brenner
Kissinger Revisited
Cesar Chelala
The Perverse Rise of Killer Robots