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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Dayuhan who wrote (50694)	10/10/2002 7:50:02 AM
From: Ilaine	Read Replies (1) \| Respond to of 281500

American ... producers who rely on subsidies or trade barriers are stealing twice True, but there's more to the equation than price. For national defense and security purposes, it is important to maintain some key domestic industries even though it costs more. Let me start by saying that I am far from a protectionist. I abhor corporate welfare and corporate bailouts. I think they are antithetical to our values, taking from the poor and giving to the rich. Now let me tell you about a subsidized industry I know fairly well, domestic shipping. In times of war, the US private shipping industry is used by the military to transport men and cargo - the Merchant Marine. My great uncle served in the Merchant Marine during WWII and had two ships shot out from under him. It was more dangerous than being in the Navy. The only way to maintain US flag vessels is to subsidize them, so the US government provides construction loans, pays construction differentials, and subsidizes the industry in other ways. The coastwise trade, which is from US port to US port, only US flag vessels may operate. The reason our shipping industry can't compete with foreign shipping is that we have higher standards for construction, operation, and maintenance than, say, Liberia. You probably see rustbuckets in the Pacific all the time, so you know what I am talking about. We don't allow rustbuckets, which are far cheaper to operate than clean, strong, well maintained American ships. We aren't the only country to subsidize our maritime industry, pretty much all countries with a maritime industry do the same thing, for the same reason. We need the steel industry and the farmers for the same reason. In times of war, we need to be able to rely on domestic supplies of essentials. So the issue doesn't revolve around price alone. Maybe I should write to that Reason economist and ask him to throw national security into the calculator, but for now we have to rely on Congress and the President to muddle through. I do think Bush made the wrong decision about the steel tariff, it punishes US companies which are competitive by rewarding those US companies which aren't.

To: Dayuhan who wrote (50694)	10/10/2002 10:55:02 AM
From: Hawkmoon	Respond to of 281500

Good article Steven... And even if I agree with it in principle, I also recognize the same issues the CB responded with, namely that we can't wind up having all of our capacity to produce certain goods transferred overseas. And yes.. it's all well and good to import products from developing countries with "teach them to fish" policy.. But what I'm referring to is the fact that the incredibly large US economy provides us a bit of leverage that we would be downright foolish not to exert, out of principle of "free trade".. And such leverage should be used in order to encourage Quasi- Equal Trade... "you sell a billion in products to us, and buy 1/2 of that value in US goods from us to, such and such value, then you must purchased 3/4 of that value from us (say at $10 Billion level in trade).. There is just simply NO REASON we need to deflate our wage and living standards to match those of the undeveloped world, destroying some of our industries in the process. And how when they choose to abuse their trade priviledges, or have corrupt government leaders enriching themselves rather than properly deploying such wealth in a manner that enhances the lives and wages of all the people in their country? Well, then I would say that we have the right to use our economic power to effect change in a manner that is beneficial to both parties. I believe free and unfettered trade, with few economic and social expectations placed upon the exporting developing nations, is effectively a license to economically "mine" the target market... To undercut their production costs with cheap labor, but never reinvest the proceeds in their own economy in order to create a internal market. And often when they do create that internal market, their leaders establish policies that attempt to protect their own domestic markets.. Basically Steven.. it's about politics (as always)... and there are abusers of subsidization and free trade on all sides.. But my primary concern involves not granting the "priviledge" of selling into our markets without establishing a set of mutual expectations. Hawk