Protectionism Exposed

Wall Street Journal ^ | AUGUST 5, 2009 | CHAD P. BOWN

[expat_panama]

In May, the United States slapped new tariffs on steel pipe imports from China. In June, China imposed new barriers on U.S. and European Union exports of adipic acid, an industrial chemical used to make nylon and polyester resin. In July, the EU also decided to restrict imports of steel pipe from China.

The important question now is, do these events foreshadow spiraling protectionism and tit-for-tat retaliation that threaten a global trade war? Or is trade policy always like this, and we’re just noticing more now, given the global slowdown and heightened fears of Smoot-Hawley-style protectionism?

[snip]

The count of newly imposed protectionist policies like antidumping duties and other “safeguard” measures increased by 31% in the first half of 2009 relative to the same period one year ago, which itself is not an alarming number. But many governments take more than a year to make final decisions on such policies after receiving the initial request for protection from a domestic industry. The fact that industry requests for new import restrictions were 34% higher in 2008 relative to 2007 is a worrying trend even though 2007 saw a historical low in such requests. And with the recession continuing, requests for new import restrictions were 19% higher in the first half of 2009 relative to 2008.

This suggests a wave of new protectionist measures may be on the way. While leaders of the Group of 20 large economies unanimously pledged not to resort to protectionism at a Washington summit last November and reaffirmed this in London in April, virtually all of them have slipped at least a little bit.

[snip]

[screaminsunshine]

The way to prosperity is in free but not controlled trade. We must eliminate all the PC Federal agencys and the minimum wage laws. All the regulations and taxes have screwed up our formerly Capitalist system.

[Will88]

The count of newly imposed protectionist policies like antidumping duties and other “safeguard” measures increased by 31% in the first half of 2009 relative to the same period one year ago, which itself is not an alarming number.

This economist starts with an increase in antidumping measures by some nations as indications of rising 'protectionism'. He does not say whether or not he believes antidumping measures should be allowed, or what sort of specific practices the current new antidumping measures are intended to remedy.

This is very typical of what we got from most economists: looking at the forest and a tree or two, but ignoring what's going on all around the tree or two he chooses to see. He should have explained who filed antidumping charges and why, but that would require an economist to take off the blinkers and actually look at a sequence of events from start to finish. Something they seldom seem to do.

This article doesn't supply enough information to determine who did what to whom and why.

China’s exporters were specifically named in more than 75% of these economies’ newly initiated investigations. In the second quarter, China’s exporters were targeted in all 17 of the cases in which new trade barriers were imposed around the world.

So, tell us why China is the target of most of the new investigations? And are China's markets open to all, a free trade example for all to follow? He doesn't say. Not sure just what he's said, if anything worthwhile.

[ClayinVA]

One of the major suppliers for adipic acid is Honeywell in Hopewell Virginia. I think the BASF in Freeport Texas makes this also. It is byproduct of making lactam which turns into Nylon.