Posted on 11/23/2005 10:35:06 AM PST by BransonRevival
Amid its disarray last week, the House of Representatives did do one good deed: It included the repeal of the anti-trade Byrd Amendment as part of its budget reconciliation. The White House is also pushing repeal, so opponents are now hoping Senators (including a Republican who wants to run for President) will keep this protectionism alive.
"Byrd" is named after West Virginia Senator Robert Byrd, who snuck it into a 2001 spending bill without debate. The amendment gives companies that sue for "anti-dumping" relief any duties that the government imposes on foreign competitors. U.S. companies that decline to join any dumping petition don't get to share in the Byrd droppings. In other words, sue for protection and get rewarded; keep your nose to the grindstone and get zilch. In political terms, it's a perpetual-motion protectionism machine.
It also violates global trade rules that the U.S. has agreed to observe. The World Trade Organization declared that Byrd was illegal in 2002, and it has authorized the European Union and seven other countries to impose retaliatory tariffs on American goods. This May, the EU did just that, slapping a 15% tariff on imports of 10 kinds of U.S. apparel. Canada, Mexico, and Japan have also retaliated.
According to a study by the Government Accountability Office, a mere five companies have collected half of the $1 billion in Byrd money that has been doled out since 2001. The biggest winner by far has been Ohio-based Timken Company, maker of ball bearings, which pulled down a staggering $52 million in 2004. Another Ohio company, candle-maker Lancaster Colony Corporation, got $26 million. This sure beats having to win market share.
The Commerce Department is holding almost $5 billion in Byrd money while the U.S. litigates multiple Nafta panel rulings that say U.S. anti-dumping duties against Canadian lumber violate that trade agreement. Fourteen Georgia companies got $321,000 in Byrd money in 2004, but 12 of those are lumber companies, awaiting the Canada decision.
Which brings us to the Senate, which didn't include Byrd repeal in its version of the reconciliation bill that now goes to conference. Nonetheless, 20 GOP Senators recently signed a letter to Majority Leader Bill Frist threatening to oppose final passage of reconciliation if it includes Byrd repeal once it returns from the House.
We're not surprised to see the signatures of Ohio Senators Mike DeWine and George Voinovich or Georgia's Saxby Chambliss on that letter. They're flacking for their home-state companies (see above) and no one will mistake them as Presidential timber. The really surprising name on the list, however, is George Allen, the Virginia Republican who has become the darling of some conservatives as they contemplate life after President Bush.
We wonder if Mr. Allen really knows what he's doing here. Byrd distributions in Virginia in 2004 totaled a mere $5.5 million. About $4.6 million went to Lafarge North America, and $924,000 to Titan America LLC -- both building material suppliers that stand to benefit from such protectionism as the 55% anti-dumping duty levied on Mexican cement.
In return for doing their bidding, Mr. Allen is cementing his own reputation as an opponent of free trade. No avowed protectionist has won the White House since Herbert Hoover in 1928 (and we know how that turned out), so backing Byrd doesn't look like a smart political strategy. Worse, it raises doubts about Mr. Allen's grasp of economic policy.
Modern Presidents of both parties have been ardent free-traders because they realize it is in the national interest. That's why Mr. Bush is now devoting a great deal of his time and diplomacy to advancing the Doha round of global trade talks. Byrd contradicts that policy, which is why a growing number of national business groups -- from home builders and construction companies to food processors and retailers -- are organizing to fight Byrd. They see both U.S. exports and consumers losing under Byrd to a handful of inefficient U.S. companies and their savvy Beltway lawyers. Which side are Mr. Allen and his GOP colleagues on?
If "free trade" means allowing the UN's despot controled agencies to decide for the US what is and is not acceptable
then count me as a non-free trader.
I don't think it is.
They want and like the benefits of free trade.
They just don't want to admit it.
Bill Clinton made his support of free trade proof that he was a different kind of democrat, and no "protectionist" has been elected since Hoover.
In 2004 senate elections, the 7 new senators including a couple of southern states, were clear and pro-free trade.
John Thune did vote against Cafta, but according to him, it was to send a message about the airbase, not anything relating to free trade.
Bottom line, free traders do win elections, while mercantilist/protectionists poll well but lose.
Which is more beneficial to a worker, a raise of $1000 or $1000 in lower prices?
Not America
NGO are now controlling America
$1000 raise, they may not wan the cheap chicom crap being sold. They can spend it, invest, save as they choose.
$1000 raise is better than $1000 savings on a good old American built car?
This sounds like a job for
Corin Stormhands!!!!!
They're even forcing us to import Canadian softwood. Where will it end?
Yes, I have the choose to spend on not spend as I like.
I hope they don't force us to buy foreign sugar. I enjoy paying more than double the price for basic commodities.
The $1000 savings in lower prices is worth about $1100 here in Chicago when sales tax is taken into account.
Hmmmmm.....$1100 versus $673.50. You want to change your answer?
I'm told that makes us true patriots and real Conservatives. Some folks just don't understand that we need to pay higher prices now to protect us from having to pay higher prices later.
No, I want the cash. $1000 on something I may or may not want versus money in pocket. I choose money in pocket.
Good for you. I'm sure your boss will be happy to give you a $1000 raise that will give you $673.50 in your pocket. Meanwhile the rest of America will continue to choose lower prices.
Good luck with your campaign slogan, "Vote for me, I'll raise your prices".
In a July 1995 issue of Business Week, sorry do not remember the exact week. They postulated that with so many good paying jobs going overseas that we would reach a point where now one would be able to afford the product these companies were importing. No matter how cheap they are. I think we are getting close to that point. If I can find the article I will post it.
"Bottom line, free traders do win elections, while mercantilist/protectionists poll well but lose."
Maybe you are right. The WSJ, however, says free trade is running out of gas at this point in time. We barely got CAFTA and apparently hope for a larger South American deal is now gone.
Granted, NAFTA was a huge victory for free trade. I am not quite as confident as you are about this issue, but I appreciate your positive attitude. To me, anti-free trade sentiment is a bit like brushfires in in California in the summertime. It is always cropping up here and there, and there are always some very passionate advocates, namely, people who may lose their jobs to international competition (and those who exploit their fears).
On the surface, protectionism seems easier to understand than Free Trade. The majority of people are not so confident in their ability to make a living that they easily accept the notion that an open, free trading economy is healthier and constantly creates jobs to replace those that were lost.
In addition, it does not seem that free traders can easily prove that NAFTA has had a positive effect on the American economy. Arguments are made on both sides. The fact is, you can prove that NAFTA has caused the loss of certain specific jobs. In the nature of things, it is harder to prove that NAFTA has created certain specific jobs.
Jobs are central to people's lives. Fear is central to people's psychology. I'm not trying to be negative and pessimistic and hopeless here, though it may seem that way. I'm just saying it seems that we must continually fight to sell and re-sell the idea of free trade, and that sometimes, possibly now being one of those times, it may be impossible to advance free trade any further.
So if all the good jobs left then incomes must have dropped since 1995. Maybe you can show us how far our wages have fallen? And if we couldn't afford to buy foreign products imports should have fallen.
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