December 10, 2003
RETRACTION OF STEEL TARIFFS: 'RIGHT MOVE' BUT 'POLITICALLY CALCULATED'
KEY FINDINGS
** The U.S. "climb down" on steel was
"overdue" but encouraging; it averted a global trade war.
** Media portray Washington's decision to scrap steel tariffs as a
"victory" for the WTO.
** Critics, both left and right, say it's too early to celebrate;
the truce over tariffs is "still fragile."
** The move to lift tariffs is a "political calculation"
motivated by the president's re-election bid.
MAJOR THEMES
Though 'overdue,' the U.S. finally made the 'right move'-- Making a point of noting that the
"punitive tariffs" were a mistake to begin with, business and
conservative dailies welcomed the decision to rescind them as "better late
than never" because it will "avert a ruinous trade war." Questioning the advantage of protectionism to
the U.S. economy, Asian, Euro and Canadian dailies were "hopeful"
that the U.S. gesture of scrapping its "steep tariffs" will overcome
"friction" in other trade areas.
On behalf of the optimists, Canada's National Post mused:
"We hope this is a sign he is returning to the free-trade policies he
endorsed before being elected." But
Seoul's Segye Ilbo put Washington on notice, saying "the U.S. must
learn through this experience that it should not try to manipulate the global
market by using its political influence."
U.S. only 'conceded' because of 'retaliatory threats' from EU and
Asia-- Loath to praise
the Bush administration for lifting what editorialists worldwide had denounced
as an "egregious" policy, observers credited the WTO for forcing
Washington to "give in" to international pressure. Euro, Asian and Latin papers hailed the WTO
for reasserting its "rightful role" in stopping the U.S.'
"bullying the global trade scene," declaring the move an
"undeniable" victory for the WTO.
Voicing a common view, Brazil's independent Jornal da Tarde noted
that Bush has "finally recognized" that, "at least in the trade
area, even the world's most powerful nation...must submit to international
rules."
'No reason to celebrate'-- Detractors were not
convinced that the "steel retreat" meant a change in U.S. trade
policy and expected the U.S. to apply the "poison of protectionism"
in other areas. The announcement of
restrictions on Chinese textiles imports, asserted Spain's business Cinco
Dias, "is a clear warning sign" while a center-left German daily
added, "we cannot expect a turn in U.S. trade policy." Joining critics in accusing Bush of
"again pursuing the crassest of political courses," Canada's leading Globe
and Mail averred: "Sadly, the retreat on steel does not mean the
administration is about to change its protectionist habits."
Politics 'weighed heavily' on the decision to end steel
tariffs-- Echoing charges in 2002
that the U.S. imposed steel curbs to cater to the rust belt in the run-up to
congressional elections then, now editorials portray the move as politically
calculated to help Bush in 2004. In the
upcoming election year, "Bush could not afford to run the risk of
upsetting exporting states, like Florida, which remained faithful to him,"
explained Belgium's financial L'Echo.
Liberal papers held that Bush "used the same election tactical
calculations as when he introduced the steel tariffs." Yet others warned of a "political
backlash." It could be
"dangerous," said Italy's centrist La Stampa, "steel
unions are on the war path."
EDITOR: Irene Marr
EDITOR'S NOTE: This
analysis is based on 37 reports from 17 countries, December 2-9. Editorial excerpts from each country are
listed from the most recent date.
EUROPE
BRITAIN: "Bush's Steel
Retreat"
An editorial in the independent Financial Times contended
(12/8): "George W. Bush, whose
distaste for multilateral organisations is legendary, has met his match. His reluctant decision last week to rescind
steel tariffs, though hardly a glorious moment for the U.S. president, is a
triumph for the World Trade Organisation and the rule of international
law.... Triumphalism over steel tariffs
must not lead the EU to push brinkmanship too far. Equally, the U.S. must limit that risk by
showing unequivocally that it is committed to resisting protectionism and
abiding by multilateral rules. Until it
does so, any truce over trade will remain fragile."
"Rolled Over"
The independent weekly Economist remarked (12/6-12): "It would be nice to think that a
chastened Mr. Bush had recovered his zeal for free trade. The truth is that the
White House's electoral
college-vote-counters led by Karl Rove realized that a fight with Europe, as
well as with the steel making countries in Asia who stood ready to pile in, was
not worth it.... The EU's strategy of
retaliation was especially clever. It
would slap new tariffs on Floridian oranges and a host of other American
exports from Republican southern and western states. The last thing Mr. Rove wanted was for
textile workers in the Carolinas to start voting Democratic.... Even if Mr. Bush's political calculations on
steel prove correct, his problems with trade are far from over. Should he reach a separate peace in this
tussle, there is another, bigger dispute with Europe over America's tax relief
for exporters. The deadline for
resolving it is New Year's Eve. Don't expect the White House's enthusiasm for
free trade to last that long."
"President Bush, Tear Down Those Trade Barriers"
An editorial in the conservative Daily Telegraph noted
(12/5): "As Governor of Texas with
a close interest in Mexico, George W. Bush was known as an advocate of free
trade. As president, he has squandered
much of that reputation by two measures introduced last year. The first was new tariffs of up to 30 per
cent on a wide range of steel imports.
The second was the Farm Security and Rural Investment Act, with large
subsidies for U.S. producers of cotton, cereals and soya beans. The dire
effects on farmers in poor countries were highlighted at the abortive world
trade talks in Cancun in September.
Protection of the steel industry incensed foreign suppliers and
important sectors of domestic opinion....
As leader of the free world, the United States has a special
responsibility to uphold a trading system with free exchange of goods and
services. The steel tariffs and the farm
Bill have sadly undermined its authority in an area where it should be an
exemplar."
"Trade Hopes"
The independent Financial Times commented (12/2): "If the U.S. rescinds its illegal steel
tariffs this month, as now expected, it will be a case of better late than
never. The curbs should never have been
imposed. But their removal will be
welcome, nonetheless. It will avert a
ruinous trade war, benefit the U.S. economy and reinforce the rule of
international law. Washington appears to
have been swayed by European Union pressure and the threat of sanctions. The EU has been right to stand firm. Now it needs to show it is as tenacious at
lowering long-standing trade barriers--including its own--as at fighting the
erection of new ones. On that, its
performance so far is less impressive....
European politicians constantly proclaim their yearning for greater
global influence. Now is the time to
show the EU deserves such a role. Trade
ministers should instruct the Commission today to draw up bolder proposals and
negotiate on them seriously. The only
thing Europe has to lose is the handicap its trade barriers inflict on its own
economic performance."
GERMANY: "After The
Steel Thunderstorm"
Alexander Hagelueken opined in center-left Sueddeutsche of
Munich (12/6): "The president conceded only because the threatened EU
retaliation would have hurt domestic producers and voters, and the low dollar
is currently giving them enough protection from imports, anyway. In other areas, Bush is making liberal use of
the poison of protectionism, which is slowly but surely destroying the
foundations of the world trade system. Whether he stops Chinese T-shirts at the
border or wants to maintain export subsidies for Boeing and Microsoft, he's
being in economic terms the same isolationist he was politically over Iraq, or
when he sabotaged the Kyoto Protocol. At
the same time, he can point his finger at trading partners who don't always
behave themselves either, like the EU, which is likely to postpone today a
decision to approve a variety of BT corn, thus once again extending a ban on
approvals for U.S. GMO plants that contradicts that spirit of free trade. Given that both sides are pursuing such
policies, it is no surprise that the larger project of a global trade agreement
is bogged down. The multilateral trading
system is in crisis at the very moment everybody is hoping growth will
return.... The revival of the trade
round can only come from the high priests of capitalism. In Cancun, both Europeans and Americans were
surprised by the determination with which the poor countries pressed their
demands. They have no choice but to
accept the new reality and sacrifice their absurd farm and textile
protectionism. But the Europeans refuse
to budge, preferring to leave that to others.
And the U.S. is concerned only with the election campaign. Apart from that, the U.S. government acts as
if there will never be another world trade agreement, and tries to force poorer
countries to accept bilateral trade agreements that leave decisions to the
stronger. The consequences of this
strategy will haunt the world long after Bush's steel intermezzo has been
forgotten."
"Overdue Decision"
Center-right Frankfurter Allgemeine stated (12/2): "Now President Bush obviously wrestled
through to lift punitive tariffs on cheaper foreign steel earlier than
planned. George W. Bush's decision is
overdue. By erecting this trade barrier,
the U.S. president did his country a bad service. The steel-processing industries in the United
States have had top pay higher prices since then.... The punitive tariffs may have delayed the
necessary staff reductions in U.S. steel industry, but they have not prevented
them. We cannot expect a turn in U.S.
trade policy. The decision was made only
under pressure from U.S. trading partners and looming sanctions amounting to
billions of dollars. Regrettably, it
does not spring from the insight that U.S. protectionism is detrimental not
only to the Europeans, Japanese, Brazilians, and many other, nor did it result
in the promised usefulness for the U.S. economy."
"Tariff Cuts For The Voters"
Marc Hujer penned in center-left Sueddeutsche Zeitung of
Munich (12/2): "For a moment the
world can heave a sigh of relief.... If
the punitive tariffs are abolished, this will not only success for Europe and
Asia, but also a victory for the international community, which is dependent on
the United States and its robust demand....
The good news is that there are limits of protectionism today and that
the economies are linked so closely to each other that no government, not even
the Bush administration, can afford to stop trading. The bad news is that Bush did not act on
insight but used the same election tactical calculations he used when he
introduced the steel tariffs.... The
Europeans...have not yet managed to change the president's view. Someone like him is not an unconditional
supporter of free trade. It is part of
Bush's success not to have a clear opinion.
Today he is pleasing U.S. industry with tax cuts, while, on the
following day he is putting it off with an increase in spending.... The same is true for trade policy. Bush talks over and over of the advantage of
an international exchange of goods, but only if it is necessary. While he is abolishing steel tariffs, he is
planning new tariffs on textile imports from China. The fear of losing the next elections is
still greater than the hope that free trade will, in the end, be beneficial to
all."
"Coaching From The WTO"
Business daily Financial Times Deutschland of Hamburg had
this to say (12/2): "All
indications are that President Bush will now give in and lift the
tariffs.... The decisive factor was the
WTO decision, since even the powerful United States shies away from openly
breaking WTO rules.... It would be even
better if the president now came to the insight that trade wars like this only
have losers.... The U.S. government must
simply recognize that the domestic steel industry is simply producing steel
that is too expensive. No country can
afford to finance such competitive weakness for a long time."
"Victory For The WTO"
Maren Peters said in an editorial in centrist Der Tagesspiegel
of Berlin (12/2): "It seems that
the WTO has gained the upper hand in the controversy with the powerful United
States. But it would be too early to
celebrate the victory of the WTO over protectionism. The steel conflict is only a minor link in a
long series of trade conflicts.... But
the steel dispute gives the WTO, whose end was predicted in Cancun two months
ago, a new authority. It shows that its
arbitration mechanism works. The victory
in the steel conflict creates hopes that a result can still be achieved at the
stagnating WTO round about a further easing of trade rules."
ITALY: "Bush Says
Good-Bye to Steel Tariffs--'Free Trade Is The Priority"
Maurizio Molinari noted in centrist, influential La Stampa
(12/5): "George Bush rescinded the tariffs on steel imports 11 days before
the EU ultimatum deadline.... At the end
of a twenty month-long tug of war with the EU, Japan, and South Korea and after
the WTO's ruling that they were illegal, the White House lifted the tariffs
explaining that 'they had achieved their purpose.' British PM Tony Blair had
particularly insisted that Bush abolish the duties during his recent bilateral
meetings on Downing Street. But Bush's
decision may be dangerous. Although the problems with Europe have begun to
clear, steel unions are on the war path."
"Bush Gives In And Rescinds Steel Tariffs"
Marco Valsania reported in leading business Il Sole-24 Ore
(12/5): "The Bush Administration has rescinded steel tariffs, giving in to
the WTO's ruling, to the retaliatory threats of European and Asian partners and
to the looming global trade war. The formal announcement came yesterday in a
presidential communiqué: 'The time has come,' he said, ' to cancel the
protective measures.' The European reply came quickly: the EU immediately
called off preparations for retaliation.
The reversal was not easy for Washington: internal tensions were
apparent by the announcement itself, which was entrusted to press advisories
and a spokesperson only after frantic meetings between the President's
advisors. Bush tried to soften the blow
for the U.S. steel industry--without for the moment angering his international
partners--by promising to defend the industry's interests with less forceful
means. The new measures include monitoring foreign companies and their exports
to the U.S. with the objective to avoid large flows of foreign steel into the
U.S."
"Steel, Bush Gives In To EU"
Ennio Caretto opined in centrist, top-circulation Corriere
della Sera (12/2): "Bush does
not want an international trade war after Japan and other countries threatened
to impose sanctions of 2.2 billion dollars on U.S. products; most of all, he
does not want the sanctions to have repercussions on key electoral states like
Florida."
"Bush Ready To Announce Revocation Of Steel Tariffs"
Mario Platero wrote in leading business daily Il Sole-24 Ore
(12/2): "Tariffs on steel imports
in the U.S., which were imposed one year and a half ago for domestic
reasons...were in clear violation of international accords. Therefore, Europe wins. It has always kept a hard line and yesterday
it reiterated its readiness to impose sanctions of 2.2 billion dollars if the
U.S. didn't lift all its tariffs; the WTO wins, strengthening its role as
multilateral arbiter. Most of all, the
international situation wins: since the
global economy is picking up speed, and the American one in particular,
fomenting a trade war between the main actors of the recovery could have had
disastrous consequences."
BELGIUM: "Who Is The
Real Winner"
Jean-Pierre Coppens in financial L’Echo editorialized
(12/6): “President Bush has ended the
tariffs on steel imports. It is an
important victory that all are claiming.
First, the WTO, which on two occasions condemned the American protectionist
policy. Secondly, the plaintiff
countries and the EU, which now state that the U.S. market is henceforth open
to exporters. Lastly, President Bush
himself, who can pride himself with having avoided sanctions that the United
States’ main trading partners were going to enforce. In this electoral year 2004, Bush could not
afford to run the risk of upsetting exporting States, like Florida, which
remained faithful to him.... It is
undeniable that it is a victory for the WTO. Yet, it is obvious that President
Bush was more concerned by the consequences of sanctions than by a condemnation,
even if the latter came from an internationally recognized body. Bush could
simply not afford to upset the United States’ main trading partners.... The plaintiff countries should think twice
before crowing over their victory. Indeed, European steel sector circles are
underlining the possibilities that the U.S. steel sector and the U.S.
Administration have to circumvent the official end of the protectionist
measures. There are many options, and if U.S. steel manufacturers voice their
fears, the Bush Administration might adopt an attitude that would be favorable
to them. That would mean back to square
one, with another complaint before the WTO, another threat with sanctions, and
another loss of time and of market shares. So, who are the real winners?”
IRELAND: "Bush Blinks
First In Face Of Trade War"
Conor O'Clery held in the center-left Irish Times
(12/5): "Mr. Bush declared that his
temporary steel tariffs had succeeded in giving the U.S. steel industry enough
time to restructure but, in a concession to the steel industry, ordered a
system of steel-import licensing to spot any surge of steel imports.... By lifting the duties of up to 30 per cent on
steel imports 15 months earlier than planned, the Bush administration has
avoided 100 per cent EU sanctions on such items as U.S. orange juice, motor
cycles, vegetables and cigarettes.
Politics weighed heavily on the decision to end the tariffs, introduced
in March 2002 to protect inefficient U.S. steel producers. The steel-producing
states of Pennsylvania, West Virginia and Ohio could prove vital to Mr. Bush's
re-election in 2004, while many crucial swing states produced the exports
targeted by the EU. U.S. trade
representative Mr. Robert Zoellick said the prospects for U.S. steel had
improved since March 2002 with demand rising in China and Russia, and cutbacks
in U.S. steel output by four million tons. The benefits to the industry no
longer outweighed the 'marginal cost' to consumers, he said.... In contrast to his usual practice of
personally making major policy announcements, Mr. Bush made his decision known
in a written statement issued by his press secretary."
"Bush Pressed For Steel Decision"
Conor O'Clery wrote in the center-left Irish Times
(12/2): "U.S. President George
Bush is under pressure from his advisers to cut back U.S. tariffs on
foreign-made steel to avoid a global trade war.
A decision is likely before the end of the week. Whatever he does, Mr. Bush faces a political
backlash which could have ramifications in next year's presidential
elections.... By ending them Mr. Bush
risks losing support in Pennsylvania, Ohio and West Virginia, the states where
most American steel is manufactured. By
keeping the tariffs, however, Mr. Bush risks infuriating manufacturing
interests in states like Michigan and Minnesota where the protectionist
measures have kept steel prices high.
Key White House advisers and U.S. trade representative Mr. Robert
Zoellick have recommended an end to the tariffs because of the even more
serious risk of a world trade war....
The president will also be weighing the counsel of his influential
political adviser Mr. Karl Rove, as the states involved account for almost
one-third of the 270 electoral votes needed to win the White House in
2004."
NORWAY: "The U.S. Gives
In On Dangerous Steel Quarrel"
The newspaper of record Aftenposten commented (12/8): "The EU has argued the issue hard.… The
interesting thing in this regard is that EU as a power of trade is equal to the
U.S.… And it’s been demonstrated how great influence the EU can achieve over
U.S. policies when its members stand united and put their total weight on the
scale. This will probably also apply on other issues, such as in Iraq and the
Middle East.… Since October 2000, the month before Bush was elected President,
the USD has dropped by 46 % against the Euro.… The steel quarrel may be a
signal that more important matters than a miserable steel tariff is about to
change.”
SLOVENIA: "Goodbye,
Tariffs"
Andrej Brstovsek commented in left-of-center Dnevnik
(12/5): "President Bush lifted
steel tariffs yesterday, because they had become too heavy a burden before the
approaching election campaign. To some extent, the tariffs were lifted because
of their unpopularity in states with strong steel-consuming industries, and
partly because of the EU’s threat of counter measures.… The steel tariff case
is another story demonstrating that election campaign promises expire on the
election day. Both Bush and Gore were
supporters of free trade in 2000. When a
member of Bush’s election staff was asked what was the difference in their
stances, he said: ‘The fact that we mean it.’ They had meant it until tariffs
proved to be a handy political weapon.
Namely, the attitude toward individual political issues may play a crucial
role in American politics. Labor unions
support the candidate who is expected to give them more favorable policies.…
Therefore, it is not surprising that Bush...has introduced certain political
measures for the protection of a domestic industry. He promised steel tariffs
before the 2002 Congressional elections, and with them contributed to the
Republican victory in steel states. But his [measures] have stopped half way
because the tariffs were supposed to be in place for three years. The White
House explained yesterday that the measures had achieved their goal.… But, will
anyone be satisfied at the end of this story? Two hundred thousand individuals
in steel-consuming industries are said to have lost jobs because of the steel
tariffs...while steel industry workers will not enjoy their benefits for the
full three years. Selling the tariff story as an acceptable economic
intervention which protected domestic workers and did not result in a trade war
will depend on the President’s skill.
The task will not be easy.”
SPAIN: "Steel And Free Trade"
Centrist La Vanguardia reflected (12/5): "The record
of the current U.S. Government is not especially liberal for a Republican one,
which typically is in favor of the free trade.
The primary sector is still very subsidized and during this term of
office an agricultural law clearly damaging to the developing countries has
been enacted. Obviously, the failure of the negotiations in
Cancun, that put at serious risk the Doha negotiations for trade
liberalization, is not only the U.S.' fault, but its attitude has, in general,
been tight-fisted."
"Bush Loses The Battle Of The Steel"
Business Cinco Días wrote (12/5): "Although it would be difficult to
specify if finally the external pressures carried more weight than the internal
ones, what is clear is that this defeat in the battle of steel shows that the
unilateralism imposed by the Bush
Administration in all of its foreign policy is not unbeatable.... In spite of this, there are no reasons to
celebrate. The Bush government's
protectionist tendency can worsen with an eye towards the next elections. And the recent announcement of restrictions
on Chinese textile imports is a clear warning sign in this sense."
EAST ASIA
AUSTRALIA: "Bush Shows Sense By Bending On Steel"
An editorial in the national conservative Australian
asserted (12/8): “Rescinding his harmful
steel tariffs last week, President George W. Bush said they had 'achieved their
purpose.'... In truth, the tariffs had
only one purpose, which was to shore up the president in key rust-belt states
such as West Virginia and Ohio in the run-up to next November's election. In
that purpose, the tariffs have now most certainly failed.... In the end, with the tariffs producing a
backlash in states like Michigan and Wisconsin--whose key industries use steel,
rather than make it--they were not even worth anything politically. Mr. Bush has learnt at first-hand the chief
peril of subordinating trade policy to domestic political imperatives: you
can't punish foreign producers without hurting local consumers as well.... If
all this has saved some presidential face--fine, now let's move on. Mr. Bush
preached a strong free-trade message in 2000 against the born-again protectionist
Al Gore. It did him no harm then, and he should go with it again in 2004.”
CHINA: "Tariffs Harm
Others Without Benefiting Oneself"
The independent Chinese-language Hong Kong Economic Journal
commented in an editorial (12/5):
"Bush should know very well that protectionism will only harm
others without benefiting the U.S. and that a trade war will only further
undermine the strength of the global economy.
Steel tariffs will not increase employment opportunities for steel
workers. What's more, research has
indicated that the steel tariffs seriously harmed the U.S. industries that use
a large quantity of steel. Imposing
import restrictions on Chinese textile products and other products will have
little impact on China.... and the
restrictions will not help the U.S. textile industry increase its
competitiveness. Furthermore, millions
of American consumers will suffer. Then
what is the advantage of protectionism to the U.S. economy?... The current trend of the U.S. economy is
favorable. The November employment
figures show that the labor market is picking up. Bush has seized this opportunity to announce
the removal of steel tariffs.... Giving
up protectionism is in the best interest of the U.S. as well as the world. If Bush can think strategically and make free
trade his campaign strategy and the core of his policies, the whole world will
heap praises on him."
JAPAN: "Retraction Of
Safeguard Tariffs To End Trade Friction?"
An editorial in the top-circulation, moderate Yomiuri
observed (12/6): "The latest decision by President Bush to scrap safeguard
tariffs on steel imports has averted a global trade war. The Bush administration's retraction of
safeguards was a calculated move linked to the President's bid for re-election
in 2004. Despite a slight recent
improvement in the global economy, it is still uncertain whether this trend
will continue. The emergence of a global trade dispute could hamper smooth
transactions in services and goods and undermine the slight bounce back in the
world economy. We are hopeful that the
U.S. administration's decision to scrap its steep tariffs will serve to
overcome friction in other trade areas.
We also hope that Washington will cooperate with Japan and the EU in
overcoming the current gridlock in efforts to resume multilateral (WTO) trade
talks.
"Will U.S. Repeal Of Safeguard Tariffs Bring An End To
Protectionism?"
An editorial in the liberal
Mainichi observed (12/3): "The Bush administration has reportedly
decided to repeal its 20-month 'safeguard' tariffs on imported steel following
a final WTO ruling against the U.S. practice and moves among Japan, the EU and
other nations to impose retaliatory tariffs on U.S. exports. It is only natural that the U.S. administration
should retract these politically motivated tariffs. With the 2004 presidential
election drawing near, the U.S. administration's trade stance appears to have
become more protectionist.… Following the WTO ministerial in Cancun, moves are
reportedly afoot in the U.S. and other nations to conclude bilateral free trade
agreements (FTAs). But the multilateral free trading system is indispensable to
make these bilateral FTCs more effective and functional. Ultimately, trade protectionism and
unilateralism will only deal an immeasurable and negative blow to the world
economy."
SOUTH KOREA: "Confusion Over Yongsan Base Realignment, Very
Disappointing"
The government-owned Daehan Maeil editorialized (12/6):
"The Ministry of Defense announced that it received notice from the U.S.
that the UNC and CFC will be moved out of Yongsan to the South of the Han
River, but after a few hours denied receiving such notice...This type of
attitude by the government makes the Korean people more confused and increases
the people's concerns over their security.... The government must come forward
with the details of its talks with the U.S. on the realignment of the USFK, and
ask for the understanding of the people. If the United States' new global
military strategy makes it inevitable for changes within the USFK, then the
government must admit the true reality to the people and come up with concrete
countermeasures. The U.S. must also keep the symbolic significance of the UNC
and CFC in mind, as well as the security concerns of Koreans, while seeking for
an agreement on this matter with the Korean government."
"U.S. Must Stop Excessively Imposing Safeguard Measures"
The conservative Segye Ilbo editorialized (12/6): "The
U.S. announced that it will withdraw its tariffs against imported
steel.... Such measures are believed to
be taken in fear of possible damages that many states could suffer due to other
country's retaliatory actions against U.S. products and agricultural
goods.... It is encouraging to see the
WTO playing its rightful role in stopping the U.S. bullying the global trade
scene.... However, it is true that the
U.S. measure was also a result of pressure from the global community, where
there have been some changes in the international order, due to the worsening
situation in Iraq. The U.S. must learn through this experience that it should
not try to manipulate the global market by using its political influence."
SOUTH ASIA
INDIA: "Lesson In
Protectionism"
The pro-economic-reforms Business Standard remarked
(12/9): "Most observers will agree
that the main reason why U.S. President Bush has withdrawn his import tariffs
on foreign steel is not high principle but the fact that, after the WTO found
his action illegal, the EU threatened to impose punitive sanctions worth
billions of dollars of U.S. exports, judiciously targeted on items like orange
juice from Florida, one of the states critical for a Bush's re-election.... Yet, what is drowned in the outcry against
the U.S., is the fact that the U.S. steel industry has used the period of
tariff protection to restructure itself....
This is the lesson for India which, along with the U.S., is the world's
largest user of anti-dumping duties to protect local industry.... If India does feel the need to protect local
industry, it makes more sense to use 'safeguard duties' rather than
'anti-dumping' ones, since the rules for invoking safeguards require that
Indian industry come out with a concrete plan to restructure itself before
getting any protection."
"Steeling For Competition"
An editorial in the pro-economic-reforms Economic Times
asserted (12/8): "The United States
has withdrawn the safeguard tariffs it had imposed on steel imports in March
2002 - well before the completion of their three-year term. Of course, the U.S. president would have the
world believe that 'these safeguard measures have now achieved their purpose,
and as a result of changed economic circumstances it is time to lift
them.'... It is no coincidence that the
U.S. climb-down comes barely a week before the 15 December EU deadline for
retaliatory action--following the ruling of the WTO appeals panel that the U.S.
duties were 'inconsistent with the WTO Safeguards Agreement and the GATT 1994'
- against U.S. exports. The proposed retaliation would have been insignificant
compared to annual U.S. exports of nearly Dols. 1,000 billion.... It shows that
in a multilateral framework, it is possible for countries to make their voice
heard even against the mighty United States. In that sense, it is a victory for
the WTO and strengthens the case for free world trade as well. But for the WTO
agreement, it would have been difficult to imagine the U.S. backing down like
this. The U.S., in turn, has reiterated its commitment to the WTO. Had it not
done so, the future of the WTO would have been seriously endangered."
WESTERN HEMISPHERE
CANADA: "Backing Down
On Tariffs Right Move"
The conservative Gazette observed (12/8): "On softwood
lumber, on steel, on farm products, Bush has repeatedly betrayed his - and his
party's- rhetoric of trade competition. He has brought in tariffs, quotas, and
domestic subsidies that have distorted markets, cost U.S. consumers untold
millions, frustrated trade reformers in Latin America and elsewhere, deprived
Third World peasants of access to U.S. markets, and slowed the pace of trade
liberalization worldwide. So it was a relief to see Bush's administration back
down, last week, on steel tariffs brought in a year ago to prop up
old-technology U.S. steel firms. But
it's more than a relief, it's downright encouraging, to understand why Bush has
reversed himself.... Everyone recognizes
the reality: the European Union was about to retaliate with tariff hikes aimed
squarely at the exports of certain big states vital to Bush's re-election next
year, starting with Florida. But there's another layer to this, and here's the
good news: some U.S. commentators have noted that the steel tariffs, while
protecting jobs and profits in a few 'steel states' --such as Pennsylvania and
West Virginia--were intensely unpopular with whole industries, led by the
automotive sector. That's because more-expensive steel means more-expensive
cars, and so fewer new-car sales."
"Sound The Steel Retreat"
The leading Globe and Mail opined (12/5): "The Bush administration does not often
acknowledge its mistakes or reverse course.
But it did so yesterday, abandoning punitive duties on steel imports from
the European Union, China, Japan and a handful of other countries. The welcome
move averts a dangerous trade war.... In making the announcement, U.S.
President George W. Bush cloaked himself once again in the garb of an eager
apostle of free trade. It is not a convincing act. For all his free-trade
rhetoric, Mr. Bush has typically followed the path of political expediency in
bowing to pressure from U.S. producers and trade unions for import restraints
on such key commodities as farm products, softwood lumber, steel and textiles.
Now, in canceling the most egregious of his protectionist measures, he is again
pursuing the crassest of political courses.... Sadly, the retreat on steel does
not mean the administration is about to change its protectionist habits and
return to the traditional Republican embrace of freer trade - not when it faces
tough assaults from Democratic opponents who have zeroed in on the heavy job
losses that have occurred on Mr. Bush's watch. Yet there is little doubt that
protectionism has done far more harm than good for the U.S. economy and the
financial markets, while doing nothing for Mr. Bush's credibility when it comes
to promoting free trade abroad or defending the interests of consumers at
home."
"Turfing Tariffs"
The conservative National Post editorialized (12/5):
"George W. Bush was elected President of the United States on a free-trade
platform. But once in office, he embraced a variety of politically expedient
protectionist causes. One particularly egregious example was Mr. Bush's 2002
decision to enact hefty tariffs on overseas steel.... With less than two weeks to go before the
EU's payback was to take legal effect, however, Mr. Bush blinked yesterday,
signing a proclamation that ended the tariffs outright. As with any coddled industry stripped of its
privileged treatment, U.S. steel producers are squawking. But this was the
right decision. Besides being unfair to foreign producers, the tariffs hurt the
overall U.S. manufacturing sector by artificially boosting domestic steel
prices. Moreover, flouting the WTO's decision on such a high-profile issue
would have delivered a crippling blow to the international body, and might even
have called into question the possibility of co-operation on other trade
issues. Good on Mr. Bush. We hope this is a sign he is returning to the
free-trade policies he endorsed before being elected."
ARGENTINA: "A
Calculated Move"
Paula Lugones, international columnist of leading Clarin
commented (12/2): "Yesterday's move
was a very calculated election move targeting (Bush's) re-election--the impact
of the elimination or stay of steel subsidies was minutely measured in certain
states in comparison with the consequences of possible European sanctions. While the measure 'could irritate' some
districts, it could prevent Europe from imposing tariffs on Florida lemons,
Florida being crucial in the tight presidential elections that brought Bush to
power. On the international front,
through this measure, Bush would also avoid a confrontation with Europe while
he would take an important step toward free trade beyond rhetoric and local
interests."
"Commercial And Political Interests Are Entwined"
Ana Baron, Washington-based correspondent, wrote in leading Clarin
(12/2): "In election years, the
relationship between commercial and political interests becomes much more
frequent than in other time. Bush's
decision to lift steel tariffs imposed only 20 months ago is related to his
need for ensuring the support of the powerful lemon producers from Florida, a
key state to his re-election. But this
is not the only example. Currently, the
U.S. is negotiating a free trade deal with Australia like the one it reached
with Chile. Nevertheless, this time the
Bush administration is attempting to impose a new clause (on Australia) only
for election purposes. The White House
wants Australia to eliminate the system whereby the Australian government
negotiates the price of medicines manufactured by U.S. pharmaceutical laboratories
on behalf of Australian citizens....
Since the financial and political support from the U.S. pharmaceutical
industry in an election year is decisive, there is no doubt the White House
will insist on imposing this clause....
The most serious thing is that if the U.S. manages to impose this clause
on Australia, such a U.S.-Australian deal will set a precedent for all other
free trade deals."
BRAZIL: "Lobby vs.
Lobby"
Economic columnist Celso Ming remarked in center-right O Estado
de S. Paulo (12/9): "Bursts of
protectionism such as the one resulting in the adoption of safeguards for the
U.S. steel industry in 2002, which has now been revoked by President Bush, may
occasionally occur. But they are now up
against the logic of the current system of production, which demands fast and
cheap global supplies. This is why they
tend to be rescinded.... The lobby
formed by steel consumers persuaded President Bush to revoke his safeguards 15
months before they were to end. This is
the result of the dynamics of the global sourcing system, which reacted against
the inflated prices of the protected plants....
One of the outcomes of President Bush's decision was the strengthening
of the WTO."
"U.S., WTO, The Steel Case And Lessons For Brazil"
Business-oriented Valor Economico (12/8) editorialized:
"Both the WTO and multilateralism have been unquestionably victorious and
strengthened as a result of the USG's decision to eliminate the surtaxes it has
imposed on steel imports.... The Bush administration took that measure against
its will.... Less than one year before
the elections that may re-elect him, the president is thinking only in
electoral terms. The barriers against
steel imports were aimed at obtaining support from voters in states where the
steel industry is important. The decision to rescind them follows the same
reasoning.... By accepting the WTO's
resolution, Bush has not given any sign that he is more committed to the free
trade principles that he defends in speeches and rejects in practice. A clear
example of his willingness to maintain protectionism emerged a few hours after
the announcement that the surtaxes would be lifted. More anti-dumping measures
against imported steel products were announced.... The U.S. anti-dumping legislation is a point
of honor for the Bush administration in its international trade discussions,
including the FTAA. By no means will the
U.S. administration agree to negotiate it.
Along with the Farm Bill, it is one of the major mechanisms that
maintains protection for U.S. products and distorts essential free trade
principles.... As long as these
instruments are retained, there will be very little real hope of trade
liberalization for the less powerful nations around the world."
"A Barrier On Steel Exports Fell, But Another Was
Raised"
The lead editorial in center-right O Estado de S. Paulo
opined (12/6): "Only a few hours after having announced the end of
barriers it had imposed on steel imports, the USG once again demonstrated its
inclination to adopt protectionist measures.... While making public the
decision, the U.S. administration had already prepared another anti-dumping
measure, this one affecting exporters of steel cables used in concrete
construction. The Bush administration avoided the retaliation authorized by the
WTO, but opened another [path to] confrontation on trade. Once again Brazil is
one of the nations most affected....
Even without explicitly contradicting the WTO, the USG will always be
ready to act unilaterally in accordance with its domestic or foreign interests.
Such a trend has become more evident in the Bush administration.... Almost all of its decisions about
international trade have been marked by protectionism."
"Respect For International Rules"
Independent Jornal da Tarde editorialized 12/8):
"Although it had some economic consequences, President George W. Bush's
decision to revoke the barriers he had imposed against steel imports is
particularly important because of its special political significance. With the
decision, Bush has recognized, at least in the trade area, that even the
world's most powerful nation in economic and military terms must submit to
international rules. The withdrawal of the barriers will not result in any
flood of imported steel into the U.S. market. The dollar's devaluation against
the euro and the yen has made U.S. imports more expensive. Significant changes
in the world steel market since the beginning of last year have also
discouraged exports to the U.S.... While making the decision to revoke the
barriers, Bush and his staff certainly took into consideration the political
cost that trade retaliation would impose on the White House at the very moment
when the electoral campaign is beginning."
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