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 U.S. gets smacked by WTO
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| Author | Topic: U.S. gets smacked by WTO |
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Chaon Moderator |
posted 11-14-2003 03:33 AM
  
Steel tariffs http://www.forbes.com/2003/11/11/cx_da_1111topnews.html
quote: (Thomas Usher, chairman and CEO of United States Steel) Where are these polls being taken? Pittsburg? And the support is bipartisan... Protectionist Republicans? IP: Logged |
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Sam Mc Kee Member |
posted 11-14-2003 08:52 AM
RINOs.  And yes, protectionists running on the Republican ticket. Pollsters can get the less well-informed to agree to almost anything by phrasing the question correctly. "Do you think that American steel workers should lose their jobs to overseas workers?" versus "Do you want to pay unusually high prices for anything made (or transported) using steel in any way so that union workers can get paid high wages for work that others would be willing to do for less?" IP: Logged |
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Gladimir Member |
posted 11-14-2003 01:46 PM
It used to be that you could count on a Republican President to screw over the Labor Unions. What's the world coming to? I suspect these tariffs will be toast. IP: Logged |
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Malcos Member |
posted 11-16-2003 12:18 AM
Surely it couldn't be that the rust belt states are relatively marginal in the upcoming Presidential elections ? Malcos IP: Logged |
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annef Moderator |
posted 11-16-2003 10:30 AM
What about price supports? The U.S. is famous (infamous?) for supporting agriculture. Cotton comes to mind (I live in a low-rainfall state where cotton growers get acre-feet of water for irrigation at a rate I'd love to have for home consumption). Will leave it to the better informed amongst us to address the issue of supporting ethanol infused gasoline. I'm not sure you're right, Gladimir (BTW, welcome to the fray). Have reached the point where I think unions have become entirely too powerful. Things cycle. Unions were absolutely necessary (even if violent) in earlier times. IMO, they've become roadblocks on the way to prosperity and sorta crypto-supporters for immigrant labor (I live in a Mexico border state). Feel free to thump me. Anne IP: Logged |
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Gladimir Member |
posted 11-16-2003 08:49 PM
quote: Personally, I agree with most Agriculture subsidies in the US, but I admittedly have a problem with subsidies for growers of non-essential food crops like wine grapes or avacados. However, this is not a practice unique to the US. The European Union also subsidizes its farm industry, and protectionist Agricultural tariffs are much higher in the EU than in the US. I don't know much about ethonal infused gasoline, but its use appears set to increase with the new Energy bill going through Congress. quote:
quote: I think we're agreeing here. I too believe Unions, in their current form, have worn out their usefulness to the average blue-collar worker. However, I still think the tariffs will be reversed. [This message has been edited by Gladimir (edited 11-16-2003).] IP: Logged |
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Chaon Moderator |
posted 11-17-2003 12:30 AM
I am still unconvinced that the steel tariffs were enacted for such obvious political reasons (garnering support in the rust belt), though that would be a side benefit. I'm still leaning towards the strategical view: Somebody in the administration was looking at trade numbers, and on the list of things that America is losing the ability to produce: shoes, chairs, lip gloss, Micronauts, hammers, hackey sacks, extension cords, steel, umbrellas... WHAT? STEEL? At current rates the United States will not have a STEEL INDUSTRY within five years? Gosh Dammit we make all of our WEAPONS out of steel! Not to mention cars and buildings and container ships. Boom. And we get protectionism from an administration devoted to free trade. Somebody views steel as something too important to leave entirely to imports. IP: Logged |
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llamas Member |
posted 11-17-2003 06:21 AM
Well, if an actual steel user may add some data . . . I was at Contractors Steel in Livonia, MI, last week, buying a pickup-full of steel tube. I happened to notice, as they were loading the truck, that the steel was roll-stamped 'Canada'. I asked the salesman about the steel tariffs - he replied 'we sell/you buy at best market price we can get. Right now, the best we can get is from Canada.' So even with a 30% tariff, imported steel is still cheaper than domestic. I think that tells me all I need to know about the US steel industry. annef, I note your handbag trailing in the matter of ethanol-infused gasoline, but I'll have to let it go - a busy week. Gladimir - welcome to the Pleasuredome. llater, llamas ------------------ "All things are ready, if our minds be so." King Henry V, Act 4, scene 3 "Let us labour, then, to think well, for such is the foundation of morality" IP: Logged |
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KGB Moderator |
posted 11-17-2003 09:24 AM
quote: Why is that? IP: Logged |
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Graybeard Member |
posted 11-17-2003 02:15 PM
Gladimir wrote: "Personally, I agree with most Agriculture subsidies in the US, but I admittedly have a problem with subsidies for growers of non-essential food crops like wine grapes or avacados. A quick Google search turned up this: http://www.onrc.org/programs/klamath/latimes6.10.02.html “But only 9% of California's 74,000 farms have actually received subsidy payments and nearly two-thirds of the money since 1996--$1.8 billion--has gone to fewer than 3,500 farms. Most of the crops that fuel the state's $29-billion farm machine--grapes, peaches, plums, nectarines, strawberries, almonds, walnuts and vegetables of every hue--don't get a penny of aid. They aren't eligible. I grew up in the fruit-farming country on the south shore of Lake Erie. The farmers not only didn't get subsidies, the were vehemently against them. As my father put it "When the government pays you, pretty soon they'll tell you what to grow, and how much to grow." ------------------ IP: Logged |
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llamas Member |
posted 11-17-2003 02:33 PM
Farmers who want to harvest a crop optimize their farms to grow that crop. Farmers who want to harvest a subsidy optimize their farms to grow that subsidy. Since the US farm subsidy system is reminiscent of nothing so much as Soviet-style five-year-plans (I think it was P.J. O'Rourke who christened the USDA "Moscow-on-the-Potomac"), the inevitable result has been the rise of gigantic monocrop farms. It's a politician's dream-come-true. It buys votes in the farm states, which have disproportionate impact on the election process - Iowa caucuses, anyone? It keeps staple food precursors (corn, soys, wheat, etc) in perpetual surplus, thus ensuring that the cost of food - a key component in cost-of-living indices - remains low. And it puts in place 'swarms of officers', ensuring a nice big Federal payroll and endless power and patronage to distribute. The USDA staff continues to grow in almost direct proportion to the decline in the number of farms and farmers. And it allows politicians to leverage endless other activities, which are based on agricultural output or practices, according to their own political inclinations, and gather in the lobbyist dollars while doing so - all paid for by the taxpayer. Farm subsidies are like crack cocaine to politicians. Once they've had a taste - doesn't matter what party - they're hooked on its awesome political benefits. llater, llamas ------------------ "All things are ready, if our minds be so." King Henry V, Act 4, scene 3 "Let us labour, then, to think well, for such is the foundation of morality" IP: Logged |
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billholt Member |
posted 11-17-2003 02:56 PM
Originally posted by Chaon: quote: I don't know for a fact, Karl, but suspect that you're right ... hope you're right. I do know that if I'd been in the position to make that call, that's the call I would have made. Trouble with the WTO? Sorry about that; it's a poor second place finish to the need for the country to be self-sufficient in the make-it or break-it commodities. Irreconcilable difference with the WTO. Divorce. Surrender is not an option. Laying the groundwork for surrender to be an option, is not an option. IP: Logged |
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Malcos Member |
posted 11-17-2003 03:25 PM
With farm subsidies, it's not just the local effects. By creating surpluses, they need to be disposed of somewhere, so export subsidies are also created. This then lowers the world price, and destroys the livlihood of other farmers elsewhere. All paid for by the US taxpayer, or (and in many cases even more so) by the EU or Japanese taxpayer. With steel, it is not that the US risks losing its steel industry, just that the owners resist investing as they need to in order to raise productivity. Unfortunately everyone thinks that steel is strategic, and therefore subsidises the industry in many ways. In the end, the owners profit, and the taxpayer pays. NZ has a very small steel plant, no subsidies, and it manages to carry on, hampered rather by an inability to export to the USA thanks to tariffs. Malcos IP: Logged |
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Gladimir Member |
posted 11-17-2003 05:07 PM
quote: Well, I believe food is power, and I admit a little unease at the thought of the US not being able to produce enough food and water for its own population. The US also provides 50% of all the food disbursed as part of the United Nations World Food Programme, which has led to some interesting questions in recent years and probably provides decent arguments against farm subsidies. In any event, I would much prefer the US remain self-reliant for food and water. IP: Logged |
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billholt Member |
posted 11-17-2003 05:59 PM
Originally posted by Malcos: quote: Steel is strategic. It's not practical to make tanks from recycled aluminum cans or pottery clay. Just doesn't work. And I question your assessment of investment in the steel industry. I haven't been even on the periphery for quite a while, but would guess that at least 3/4 of current production capacity is provided by mills, or mini-mills, that are less that 20 years old. I know it's a substantial part. If NZ doesn't have the ability to make its own tanks, or automobiles, it probably doesn't affect the course of the world. If the U.S. doesn't, it does. IP: Logged |
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Chaon Moderator |
posted 11-19-2003 01:54 AM
OK, so we can (and I do) argue that steel tariffs are not craven protectionism, because there is a national, strategic interest for the U.S. to maintain the infrastructure to be self sufficient in steel. Gladimir, I want to argue that steel is even more vital than food, but I'm still kicking ideas around about how this argument is going to go. (Mostly I think it hinges on the ability to restart farming/ranching a lot faster than building the infrastructure for a steel industry- bear with me.) However, I have no idea what to make of textile quotas. Why would they do this? IP: Logged |
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billholt Member |
posted 11-19-2003 02:57 AM
Karl, As I understand it, we're close to losing our entire capacity for producing cotton cloth and clothes. Walmart is, I've read, giving up on its "buy American" practice in that area because of the price differential which it figures its customers won't accept. IP: Logged |
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Chaon Moderator |
posted 11-19-2003 03:40 AM
quote: Maybe so, but so what? Import your clothes. America has already lost the capacity to produce all kinds of stuff. This is an inevitable part of free trade. If the textile industry needs to be protected, why not protect hand tool manufacturers, or furniture producers? Which reminds me, I can get you a great deal on reversible ratcheting wrenches, min. order qty. 1000 sets. Karl IP: Logged |
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billholt Member |
posted 11-19-2003 04:23 AM
I dunno Karl, it just seems to me that with the total loss of capacity to supply any one basic commodity, comes vulnerability. Of course, I'm especially bothered by our "free" trade with China. It seems to me that the current philosophy of assuming that free trade will necessarily lead to freedom is a massive gamble, and as we give up production capacity we give up the ability to take our remaining chips and walk away from the table. That is, it seems likely to me that rather than making a permanent trading partner, what we're doing is enriching and making more powerful, an already powerful philosophical enemy. IP: Logged |
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Chaon Moderator |
posted 11-19-2003 10:09 PM
quote: Possibly. What would be the 'basic commodities' for which you think the U.S. should maintain production capability? Answer carefully, because it's obvious where I'll go with this line of thought... China: No need to preach to this choir. Coddling the dictators in Beijing used to be one of my biggest criticisms of the Republicans. Since Clinton's grovelling kowtow, it seems I'm left bitching at the entire U.S. political spectrum. IP: Logged |
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billholt Member |
posted 11-19-2003 10:34 PM
Originally posted by Chaon: quote: Obvious to you, Karl, I'm sure, but not to me. Answer: Commodites needed to survive. Commodities needed to make war. So for the first; food, clothing, shelter, transportation, toolmaking ... For the second; all those plus electronics and things that go bang. IP: Logged |
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Chaon Moderator |
posted 11-20-2003 01:12 AM
Shoes? Semiconductors? Bicycles? All pretty much gone, with minor high-end/specialty manufacturing going on in the U.S. I think it will be difficult to distinguish "things needed to survive" with "things needed to maintain a way of life". Not a lot of Americans are going to die if the U.S. is suddenly cut off from cotton clothes imports. The national interest involved in protecting this industry is minimal. So, unless the quota has deeper motivations that we do not know about (maybe having to do with China), I assert that it is craven protectionism. It is hypocrisy coming from a supposedly pro-free trade administration. IP: Logged |
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billholt Member |
posted 11-20-2003 11:14 AM
My only counter-argument, Karl, would be that to call it "protectionism" you have to asert that as an intention. IP: Logged |
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Malcos Member |
posted 11-20-2003 05:17 PM
The trouble is, Bill, that list, with a bit of creative stretching, covers justabout everything traded. And it isn't just the local consumption,, although you would pay through the nose for it in local prices (or taxes), but these programs always end up with surpluses that are then further subsidised onto world markets, beggaring other producers. Think of another angle as well, by tying your economies together, you reduce the chance that hostilities would arise, and if they did, you both suffer. If you rely on, say China for product X, then by stopping the export of X, China has significant problems as well. Retaining some strategic capacity is probably reasonable, but the political task of keeping that capacity to a strategic only level seems difficult to achieve. Then, you wonder why people regard the USA as extremely hypocritical when it comes to free trade, when it seems to want to have free trade only in the things that the USA sells to others. All in all, I could live with partial retention based on strategic needs, limited to the minimum areas, and steel is one of a few. You don't lose an ability to make clothes, the capital required is minimal. Food, you don't need subsidies to be competitive, and the large industrial farms are milking the system. Electronics, not a concern yet. Transportation, not a problem, although the US industry could undoubtedly be more competitive. Shelter, not an issue, easily ramped up and not short term critical. Toolmaking, not short term critical if you retain a knowledge base. Stick with almost completely free trade ideas, stabilising and cheaper for everyone. Malcos IP: Logged |
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billholt Member |
posted 11-22-2003 10:28 AM
Originally posted by Malcos: quote:Certainly, when you consider that anything that can be fudged, will be by someone.
quote:There's a mighty big IF. If you lose the knowledge base, all of the sudden you have approximately the capacity to do the thing of Sudan.
quote:I absolutely agree that that is eventually the only good approach ... assuming that you survive long enough for all of the other players to adopt the same attitudes toward the game and to develop their own capacity for production and desires for consumption. But the assumption is not really a given. [This message has been edited by billholt (edited 11-22-2003).] IP: Logged |
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Gladimir Member |
posted 11-30-2003 11:19 PM
The Bush Administration appears to be ready to abandon the steel tariffs.
quote: ------------------ IP: Logged |
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