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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: shades who wrote (26415)	3/27/2005 11:20:24 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

the U.S. government took an antidumping action against Poland's exports of golf carts, even though no golf carts were sold in Poland. U.S. rice producers got a countervailing duty imposed on rice from Thailand, for example, by establishing that the Thai government was subsidizing rice exports by less than one percent—and ignoring the fact that Thailand also slapped a five-percent tax on exports. Protectionism arises in ingenious ways. As free trade advocates squelch it in one place, it pops up in another. Protectionists seem to always be one step ahead of free traders in creating new ways to protect against foreign competitors. One way is by replacing restrictions on imports with what are euphemistically called "voluntary" export restrictions (VERs) or "orderly" market arrangements (OMAs). The United States could have kept Japanese car imports in check by slapping a tariff on them. That would have raised the price, so that consumers would have bought fewer. Instead, the Japanese government limited the number of cars shipped to the United States. Since supply was lower than it would have been in the absence of the quotas, Japanese car makers were able to charge higher prices and still sell all their exports to the United States. The accrual of the resulting extra profits from the voluntary export restraint may also, ironically, have helped the Japanese auto producers find the funds to make investments that made them yet more competitive. columbia.edu