Posted on 05/30/2002 7:22:19 AM PDT by madeinchina
Last week China became the latest country to impose safeguard tariffs on steel imports, claiming this was necessary to prevent a surge of imports diverted from the American market. Beijing also demanded a World Trade Organization dispute panel be formed to rule on the legality of the safeguard tariffs imposed by the United States in March. Beijing has thus chosen to engage the United States in its first formal dispute since joining the WTO last December.
Gordon Moffat, director of the Brussels-based European Confederation of Iron and Steel Industries, declined to blame Beijing for its decision to impose tariffs. He focused his ire on Washington instead. "Responsibility for this lies full square with the United States and its abusive use of safeguard instruments," Moffat declared. "The Chinese are facing the same threat as the European Union in terms of steel being diverted from the United States to its market."
It should be noted that Moffat did not blame those countries from which the surge of steel imports originates, only the United States for 'diverting' that flow from itself to others. Moffat was thus advancing the carefully crafted European Union double-standard, i.e. that it is perfectly legal and understandable for any country to protect its national steel industry from a flood of foreign imports -- except for the United States. Apparently, America must remain open and absorb whatever is sent its way in order to take the pressure off Europe. As the EU Commission has explained, Europe is not going to become "the dumping ground for all the steel originally destined for the United States." The EU quickly imposed its own safeguard tariffs immediately after the U.S. did.
The international steel crisis started with the Asian financial collapse of 1997. As export markets dried up and domestic economies stagnated in Asia, there was a glut of steel production. America, an open and still growing economy, became the target for every foreign steelmaker -- not just in Asia, but in Russia, Europe and Latin America -- trying to survive the recession and avoid being part of the 'market adjustment' that would reduce overcapacity by eliminating companies.
President Bill Clinton facilitated this strategy, proclaiming that America would hold open its markets to speed overseas economic recovery. Troubled states were invited to export their way out of their financial problems. The decision to put foreign interests ahead of American firms and workers was devastating. Until 1998, America's steel industry was investing billions in new steel technologies, products, and markets. Between 1980 and 1998, the industry spent over $60 billion on steel plant modernization, which tripled labor productivity and eliminated over 60 million tons of obsolete steel capacity. The U.S. industry was the most productive in the world, but the desperate flood of imports did not respect normal calculations, especially as foreign governments were subsidizing exports. Thirty-two American steel companies were driven into bankruptcy with the loss of over 40,000 jobs.
Faced with this predicament, the Bush Administration initiated a Section 201 investigation by the U.S. International Trade Commission. The USITC commissioners found unanimously that the American industry was being injured and recommended safeguard tariffs to stem the import surge until more normal economic conditions returned. Such a procedure is currently permitted under WTO safeguards rules. It has long been recognized that countries can raise trade barriers to protect industries suffering from a sudden onslaught of imports to give them a breathing space.
Though the flow of imports has slowed a bit, the American Iron and Steel Institute predicts that imports will still be a million tons higher in 2002 than they were before the 1997 crisis, even with the safeguard tariffs in place.
What has shocked the EU and others is that President Bush rejected President Clinton's belief that the United States has a special responsibility to sacrifice its own people for the benefit of 'the global economy' during an economic crisis. The EU has put together a coalition to oppose the United States at the WTO, both in the formal dispute resolution process and in the new Doha Round of trade negotiations. Their goal is to get new rules written at the WTO that would outlaw America's trade laws on safeguards, dumping, and countervailing duties. They would strip American firms and workers of any defense against unfair foreign trade practices.
It is because of this high-stakes struggle for world market share that the Dayton-Craig amendment passed by the Senate last week is so important. The amendment allows the Senate to consider separately, on its own merits and outside the limits of 'fast track' TPA procedures, any changes in American trade laws contained in any new international agreement.
Despite its action on steel, the Bush Administration appears divided on the issue of trade remedy laws. U.S. Trade Representative Robert Zoellick, who will be conducting the WTO talks, has often expressed his desire to negotiate away these laws. It was his decision to reverse long-standing U.S. policy against such negotiations and place the issue on the WTO agenda. Zoellick's loud protests against the Dayton-Craig amendment indicate his strong desire to give up American trade law in the Doha round.
In an editorial in the Washington Times May 28, Senator Larry Craig (R-ID) argued, "The United States Senate doesn't want to see the trade remedy laws that it passed to help American workers and businesses used as bargaining chips in trade negotiations." He noted that he and his amendment co-author, Sen. Mark Dayton (D-MN), were among 62 Senators from both parties who wrote to President Bush expressing their opposition to any trade agreement that undermines U.S. trade remedy laws.
Unfortunately, though only a minority of Senators feel as Zoellick does, they include those who, because of their seniority on the Finance Committee, will dominate the conference which will write the final version of the TPA bill. Unless the American people, who will be the real losers if the WTO is allowed to declare American laws null and void, rally behind the Senate majority with a strong voice, the United States may be left defenseless in a world beset by ever escalating trade wars.
Hmmmmm. Very interesting?
What's illegal about a Sovereign country imposing tarrifs (taxes) on imported goods? Every country in the world (that I know of) does it - what's so bad about the US doing it?
Oh yeah, I forgot, the US is everyone's whipping boy.
And yet the unions keep giving all their money and support to the Democrats. Go figure. It must be the Democrats willingness to kickback to the union leaders and overlook their illegal actvities.
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