Will We Be Bogged Down on Trade?
Just some brief thoughts about trade, and I won’t just be picking on George Bush. I just wonder, now that we’re in all of these trade agreements, how do we alter or scrap them?
Just to refresh memories, it was Clinton-Gore that pushed through some of the big trade agreements. Remember the debate between Vice President Al Gore and businessman and sometimes candidate Ross Perot? While many Republicans tended to favor the trade agreements, not everyone was in lockstep, as Pat Buchanan was probably the most prominent Republican to oppose these agreements. Democrats were a mixture of support, and vociferous opposition, with, as I recall, less than half of congressional Democrats supporting the administration’s trade policies.
Not long after Bush took office, the American steel industry, suffering terrible losses since the 1990s, and with several companies in bankruptcy, asked for help from Congress and the Bush Administration to curtail low cost foreign steel imports. In a fairly amazing development, the Administration responded with duties on many types of steel and steel products, with the duties scheduled to last for three years. I’m sure the Administration also had the State Department try to smooth over ruffled feathers in the countries affected by this change in policy. Other countries growled, but essentially that was all they did, at least at first.
I don’t remember every detail, but if memory serves me right, by World Trade Organization “rules,” the Administration had to review it’s policy every so many months. Each time a “review” was in the offing, other countries turned up the rhetoric, with Russia being the most vocal. The Administration gradually lifted the duties on certain small specialty steel imports, but kept the duties on the vast majority of imported steel. By the halfway point in the policy, other countries, but Russia in particular had turned up the heat, threatening retaliation against American products coming into their respective nations. American businesses that were selling their products to these countries began to complain that they would be severely hurt, if trade duties were placed on their goods. Eventually, the Administration declared the policy a success and cancelled the remaining import duties. By that time, the American steel industry had recovered somewhat.
The question is, now that Democrats have control of Congress, will they be able to curtail the loss of American jobs, principally in manufacturing, to other countries. To do so will require changes to trade agreements. The problem is, we’re knee deep in trade agreements, and other countries are not going to just stand by and accept these changes without threatening or actually enacting retaliation against the United States.
In 1930, the Congress passed higher tariffs on a number of imported products. President Hoover was inclined to veto the legislation, but reluctantly signed it. This prompted retaliation against American products, and some economists over the years have felt that this legislation turned an economic recession into a depression. (Well, not just any old depression, but THE Depression.)
I don’t like what has happened to many American jobs. Not everyone is cut out to be a nuclear scientist or a computer whiz. Having grown up in a blue collar neighborhood, I have tremendous respect for people who earn a living by the sweat of their brow and the strength of their back. American unions set standards for working people, even if many working people did not belong to a union. Many working class people were able to earn enough and have enough job benefits to live the dream of owning their own homes and cars, and of having medical care for themselves and their families. It seems that some in America have now totally forgotten these folks. We’re creating an entirely new underclass, in my opinion. The question is, are we so entwined in trade agreements that no matter what we do, we will create serious problems?
Just to refresh memories, it was Clinton-Gore that pushed through some of the big trade agreements. Remember the debate between Vice President Al Gore and businessman and sometimes candidate Ross Perot? While many Republicans tended to favor the trade agreements, not everyone was in lockstep, as Pat Buchanan was probably the most prominent Republican to oppose these agreements. Democrats were a mixture of support, and vociferous opposition, with, as I recall, less than half of congressional Democrats supporting the administration’s trade policies.
Not long after Bush took office, the American steel industry, suffering terrible losses since the 1990s, and with several companies in bankruptcy, asked for help from Congress and the Bush Administration to curtail low cost foreign steel imports. In a fairly amazing development, the Administration responded with duties on many types of steel and steel products, with the duties scheduled to last for three years. I’m sure the Administration also had the State Department try to smooth over ruffled feathers in the countries affected by this change in policy. Other countries growled, but essentially that was all they did, at least at first.
I don’t remember every detail, but if memory serves me right, by World Trade Organization “rules,” the Administration had to review it’s policy every so many months. Each time a “review” was in the offing, other countries turned up the rhetoric, with Russia being the most vocal. The Administration gradually lifted the duties on certain small specialty steel imports, but kept the duties on the vast majority of imported steel. By the halfway point in the policy, other countries, but Russia in particular had turned up the heat, threatening retaliation against American products coming into their respective nations. American businesses that were selling their products to these countries began to complain that they would be severely hurt, if trade duties were placed on their goods. Eventually, the Administration declared the policy a success and cancelled the remaining import duties. By that time, the American steel industry had recovered somewhat.
The question is, now that Democrats have control of Congress, will they be able to curtail the loss of American jobs, principally in manufacturing, to other countries. To do so will require changes to trade agreements. The problem is, we’re knee deep in trade agreements, and other countries are not going to just stand by and accept these changes without threatening or actually enacting retaliation against the United States.
In 1930, the Congress passed higher tariffs on a number of imported products. President Hoover was inclined to veto the legislation, but reluctantly signed it. This prompted retaliation against American products, and some economists over the years have felt that this legislation turned an economic recession into a depression. (Well, not just any old depression, but THE Depression.)
I don’t like what has happened to many American jobs. Not everyone is cut out to be a nuclear scientist or a computer whiz. Having grown up in a blue collar neighborhood, I have tremendous respect for people who earn a living by the sweat of their brow and the strength of their back. American unions set standards for working people, even if many working people did not belong to a union. Many working class people were able to earn enough and have enough job benefits to live the dream of owning their own homes and cars, and of having medical care for themselves and their families. It seems that some in America have now totally forgotten these folks. We’re creating an entirely new underclass, in my opinion. The question is, are we so entwined in trade agreements that no matter what we do, we will create serious problems?
Labels: economy, Herbert Hoover, labor, trade
posted by Randy at 3:36 PM
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