Political Steel

http://www.washingtonpost.com/wp-dyn/articles/A27040-2003Dec1.html

washingtonpost.com
Political Steel




Tuesday, December 2, 2003; Page A26


PRESIDENT BUSH plans to attend a fundraiser in Pittsburgh today. He also
plans this week to repeal the tariffs he applied to imported steel nearly
two years ago. In theory, these two events should have nothing to do with
one another: A fundraiser is a fundraiser, and a trade decision is a trade
decision. But in practice, the steel tariffs had everything to do with
fundraising and everything to do with winning votes in Pennsylvania. And
that goes to the heart of what was wrong with them.

Not only were the steel tariffs purely about domestic politics from the
start, no one in the administration ever pretended otherwise. Their main
purpose, which no one denied, was to win back some of the steel country
votes the president lost in the 2000 elections. Strangely, given how many of
its members profess to be free traders, it didn't seem to occur to anyone in
the administration that tariffs can have unintended political consequences,
too. As a result of tariffs, steel prices increased -- hurting car
manufacturers in places such as Michigan. They also led to a winning case
against the United States in the World Trade Organization. As a result,
Europeans have threatened to impose tariffs on U.S. products such as Florida
orange juice. While debating whether to repeal the tariffs, once again no
one in the administration pretended that any economic or trade principle was
at stake. When faced with a choice between Florida orange growers, Michigan
car manufacturers and Pennsylvania steel workers, the president simply made
a political decision in favor of Florida and Michigan.

Whether or not the president has made the right political calculation, the
long-term damage to the international trading system has been done. The Bush
administration, by imposing tariffs that it knew would probably be found to
be illegal under WTO rules, has set a terrible example for other countries,
which will now be tempted to misuse the long WTO adjudication process for
their own ends. It didn't have to be this way: Instead of playing the system
for a short-term political gain, the administration could have worked to
make it more difficult for WTO members to impose temporary "safeguard"
tariffs, such as steel tariffs, and put an end to this loophole altogether.
Alternatively, they could have offered some trade compensation to the
countries that were worst hit by the tariffs.

By pursuing neither of these options, they have left U.S. exporters more
vulnerable to the political and electoral whims of other countries.
Politicizing trade decisions may or may not help President Bush get
reelected, but it is certain to harm U.S. economic interests in the future.




© 2003 The Washington Post Company

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"If this were a dictatorship, it'd be a heck of a lot easier, just so
long as I'm the dictator." - GW Bush 12/18/2000.

"To announce that there must be no criticism of the president, or that
we are to stand by the president right or wrong, is not only unpatriotic
and servile, but is morally treasonable to the American public."
---Theodore Roosevelt

"I think all foreigners should stop interfering in the internal affairs of
Iraq."
-- Deputy Defense Secretary Paul Wolfowitz,