Posted on 09/09/2005 5:24:03 AM PDT by OESY
If the feds really want to help the economy post-Katrina, here are four words: lumber, cement, shrimp and steel. They all have prices higher than necessary because of U.S. anti-dumping trade law.
Start with lumber and cement, which will soon be in great demand to rebuild the tens of thousands of damaged homes. Prices are sure to rise as reconstruction begins, but thanks to U.S. tariffs as high as 27% on Canadian lumber, American home buyers already pay an extra $1,000 on average for their shelter. The same goes for U.S. duties on Mexican cement, which have averaged 55% since 1990. Now would be an ideal time for Washington to declare a truce in these trade spats and reduce the price of rebuilding.
Then there's shrimp....
So this is also a perfect time to review the anti-dumping duties the U.S. imposes on foreign shrimp. The U.S. International Trade Commission, which determines these things, is already scheduled to meet this month to consider relief for India and Thai shrimp after the December 2004 tsunami. But the ITC ought to do even more post-Katrina for American consumers and waive duties on all foreign shrimp.
And while we're at it, consider specialty steel, which depends on hydrogen gas produced in the Gulf.... Steel prices are rising fast in anticipation of tight supplies, which means higher prices for American companies making cars, appliances and many other products. So how about lifting anti-dumping tariffs on imported steel to ease any domestic shortages and help U.S. manufacturers trying to stay competitive?
The Beltway impulse is to assume that the only way to respond to a natural disaster is to spend more money. But these four easy trade pieces would help everyone without taxpayers having to spend a dime.
(Excerpt) Read more at online.wsj.com ...
The counter to this point is do we want to put these industries out of business to save a $ now.
Should we be forced to pay higher prices to protect what are in reality unprofitible businesses?
Normally, proceeds from tariffs on imported goods go to the U.S. treasury. Not this time. A law passed in 2000 allows U.S. industries that win anti-dumping suits to keep the profits from tariffs imposed on foreign competitors. It's a called "double compensation," and it has been prohibited by the World Trade Organization. No matter, Congress has decided to ignore the WTO and reward domestic producers, anyway. Which means that the domestic shrimping industry (a) was permitted to pay for an anti-dumping lawsuit with U.S. tax dollars, (b) won a huge tariff on foreign shrimp which will result in higher shrimp prices for U.S. consumers, and (c) will get all of the revenue generated by those tariffs.Big Shrimp: A Protectionist Mess. [Free Republic]As if this weren't enough, as it turns out, many of those shrimp farms in China and Vietnam primarily feed their shrimp soybean meal. And almost all of that soybean meal is imported from U.S. soybean farmers. Both China and Vietnam are now threatening retaliatory measures against the U.S. soybean industry. The other countries hit by the US tariffs may follow suit. China alone imported about $2.2 billion in soybeans from the U.S. last year, twice what it imported the year before. And a group representing nine trade groups in Thailand has threatened to ban all U.S. soybean imports in retaliation for the shrimp tariffs. Just this month, the American Soybean Association wrote a letter to Commerce Secretary Don Evans outlining the disastrous impact the shrimp tariffs could have on soybean farmers.
The Southern Shrimp Alliance boasts on its website that U.S. shrimp employs some 70,000 workers whose jobs would have fallen into jeopardy had the Commerce Department not forced U.S. consumers to subsidize the industry. But when that same industry asks the federal government to expand the immigrant visa program so that it can hire cheaper foreign labor, it becomes clear that the US shrimping industry's commitment to the American worker is about as reliable as its commitment to free trade - more opportunistic, really, than principled.
bttt fyi
One reason why the Candians may be reluctant to give us money for Katrina relief is that the US Commerce Dept. is holding approx. $4 billion in antidumping and duties(growing every day) paid by Candian sawmills over the last 5 years. The WTO and NAFTA have ruled in their favor on every subsequent time duties/tarrifs were brought before their panals. Yet the US will not give the money back or remove the duties/tarrif.
So I guess the tin foilers who shriek loss of sovereignty were wrong. These unelected WTO panels rule against us, we ignore them.
Katrina may be the end of the domestic shrimp industry. They were already pretty battered.
Yes, the U.S. does ignore WTO and NAFTA rulings when they are against perceieved U.S. interests. That is one reason why a lot of Canadians, whose livelihoods depend upon the lumber industry, don't like the U.S. They see the U.S. as not abiding by the agreements the U.S. helped to generate. It's a legitimate point in international circles. If you negotiate a treaty, you need to live up to your end of it.
Obvious statements such as this make me wonder how the protectionists can defend their lame arguments in the face of such flagrant and negative unintended consequences caused by government interference.
The company I work for is a big player in the value added shrimp business. We have watched helplessly as our customers stopped buying our products and reduced their payrolls because all the value added work was forced to move overseas. The tariffs don't apply to value added products so all that work has been outsourced along with the jobs.
To compete, we've moved much of these operations from the U.S. to China, Thailand and South America. We've managed to gain back some of the business we lost however, we had to significantly reduce operations at home, costing lots of jobs and effectively killing what was a flourishing business unit for us prior to this stupid ruling. The fact that other American's had to lose their jobs to protect a shrimp industry that is unable to compete is completely lost on those who are clueless about how free markets work. These same people troll these threads happily lecturing us about traitorous businesses outsourcing their labor - completely ignorant as to why these things happen in the first place - all the while demanding more government intervention to correct the problems created by government in the first place. Just stupid.
Good Post
The problem the Canadian sawmills have is we(the US)are their biggest customer. The lumber/osb markets are technical overproduced even with 2 million housing starts. The lumber market was in the tank until Katrina saved it. The Canadians have no where else to go with their product and the US govt. knows it.
--and the average guy not being taxed extra to support fat union cats every time he buys groceries. Then again, talk like this usually gets freeloaders screaming at us that if we don't support them then we don't love the flag as much as they do.
For crying out loud.
It's all about too much regulation. The price of lumber would be in the cellar if we had a proper policy re: logging to maintain fire safety in our forests. In each case the price is high mostly due to excessive regulation, environmental in most cases.
Until a Clinton/Gore/Kerry type president gets into office, then we kiss their tusche.
My first engineering job out of college was staking out lumber roads in the California redwoods. That state has both the most wondrous trees and the most astounding environmentalists. It's ironic but true: mindless nature-lovers end up bringing about mass extinction just as sure as mindless pacifism causes war.
So it's not the WTO taking our sovereignty, it's Democrats giving it away.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.