January 21, 2004

Trade Wars

From today's New York Post: The growing trade unease has ignited new blasts against the U.S. on two fronts in Europe. The EU took formal steps to slap penalties on numerous U.S. goods because of a controversial U.S. law that lets American companies get the duties Uncle Sam collects on foreign products sold here at artificially low prices. The so-called Byrd Amendment, now in its fourth year, allows the duties to be turned over to private industries hurt by the cheap goods, instead of flowing into the U.S. Treasury. The EU calls it an illegal government subsidy of industries. The EU said about $700 million in duties collected on imported candles, ball-bearings, pasta and steel under the Byrd law went into corporate pockets. Ohio ball-bearing maker Timken says it's awaiting a $70 million check from the Byrd law and defended it as "leveling the playing field against dumping cheap goods" here. Hmm. No one ever complains about the dumping of cheap electronic goods, or textiles, or any of the goods that are cheaper in the United States because they can be made cheaper elsewhere. The Byrd amendment, which I did a little digging into last week, is absolutely ridiculous...and is precisely the kind of thing that undermines the credibility of the government when it goes around spouting off about free trade. Notice they've taken to saying "fair trade" rather than "free trade," as if it was only fair when it didn't cost you jobs. And the idea of laying duty on a foreign product, collecting it, and then paying it directly to a competing firm is, for lack of a better word, criminal. The American taxpayer and consumer is the one who ultimately loses, paying higher prices than he would have to for goods. Way to go Congress. Way to go Bush.


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