- The Washington Times - Saturday, October 4, 2003

Weak trade policy

In “Self-inflicted wounds” (Commentary,Friday), Richard Rahn argues that the Bush administration has made a number of “politically motivated economic mistakes” concerning the U.S. economy. The first mistake, according to Mr. Rahn, was the administration’s imposition of tariffs on imported steel.

Mr. Rahn declares, “The facts are now in, and, as most of the president’s own economic advisers warned, the higher prices that steel users are paying have killed more jobs in those industries than the tariff has saved in the steel industry. For 200 years, good economists have known protectionism backfires, and the steel tariff again proved the point.”

That statement is false. The International Trade Commission (ITC) recently concluded a Section 332 follow-up investigation and found that the steel tariffs had little negative impact on steel consumers. The ITC also reprimanded trade lawyer Sanford B. Ring for issuing a “tip sheet” to respondents answering a questionnaire from the ITC seeking information concerning the impact of the tariffs on steel consumers. Mr. Ring represented automotive parts suppliers who wanted the tariffs eliminated. An article in American Metal Market titled “ITC rebukes trade attorney who wrote ‘tip sheet’ for steel users,” published Oct. 4, 2003, reports:”InWashington’s equivalent of sending a social pariah to the public stocks, government officials rebuked a Washington trade lawyer for coaching his clients to mislead government investigators trying to determine the impact of steel import tariffs on the economy.”

The truth is that the U.S. spot market for steel today is lower than in Europe or Asia. Upward price pressure is being exerted by higher energy costs and higher scrap costs, not the steel tariffs. To lower energy costs, we must expand oil and gas exploration, which is unlikely because of onerous government regulations and environmental activism. Scrap cost increases are being driven by high demand from China, South Korea and others. It’s ironic that our domestic steel industry is facing extinction because of illegally dumped foreign imports while some of these same countries are buying our scrap at record levels, forcing domestic steel prices higher.

Apparently, Mr. Rahn wasn’t aware of the facts concerning the impact of the steel tariffs; otherwise he would not have made such a statement. Unfortunately, his errors don’t end there. Mr. Rahn goes on to criticize the Bush administration for sending Treasury Secretary John Snow to China in an effort to persuade the Chinese government to allow the market to value its currency. China has been enjoying unprecedentedeconomic growth, and yet its currency, the yuan, has remained at artificially low levels. Some experts say the yuan is undervalued by 40 percent, making Chinese products that much cheaper. Mr. Rahn is concerned only that the American consumer will be hurt by a market-driven Chinese currency valuation and resulting higher prices. Of course, if the current trend continues, Americans will be unable to find higher-paying manufacturing jobs to buy those cheaper Chinese goods. Mr. Rahn wants to protect the American consumer at the expense of the American worker; doesn’t he realize they are one and the same?

Washington’s errors do not lie in steel tariffs or trying to persuade our trading partners to allow market forces to set currency exchange rates. The major failure in Washington involves a weak trade policy that allows our trading partners to ignore our trade laws and exploit our markets. What the Bush administration needs to do is introduce a balanced trade initiative and negotiate trade agreements that are fair to American workers and consumers as well as our trading partners. A $500 billion trade deficit this year is the real problem. Our largest export should not be high-paying manufacturing jobs.

RICHARD W. RESSLER

North Olmsted, Ohio

Exchanging information

Jeff Kojac is right on target in his Tuesday Op-Ed column, “Disinformation on Iraq,” when he asserts that “military power cannot be the only tool we use to touch lives around the globe.”

The increase in resources he prescribes for broadcasting also should apply to our official international exchange programs, such as the State Department’s International Visitor Program. During the half-decade after World War II, the United States brought more than 12,000 German journalists and other opinionmakers here for short-term “democratic reorientation” programs — chances to interact with private citizens in America. There is no substitute for firsthand exposure to American values and democratic institutions.

SHERRY L. MUELLER

President

National Council for International Visitors (NCIV)

Washington

A new Iraq

Arnaud de Borchgrave’s Sept. 24 Commentary column, “Lifeboat drill and compass,” doesn’t seem to add anything to our understanding, merely the usual paragraphs of anti-Israel rhetoric and miscellaneous carping about 16 words, coupled with a few whacks at the weapons-of-mass-destruction intelligence straw man, indicating that the writer has little care for the lives of millions of Iraqis, many of whom will be spared brutality and death as a result of this action.

Mr. Bush told us on the eve of this war that he would look for the United Nations to “find its legs” and come around to doing the right thing in Iraq, which appears to be happening now, however begrudgingly. Nobody expected anything but that, eventually, the United Nations would have a role in creating a new Iraq — after the war.

The “anti” nations provided nothing toward this effort, and I doubt anybody seriously thought Pakistani, Indian and Turkish troops ever would be involved. In fact, we specifically worked to keep the Turks out of the conflict, if you recall. “New” Europe is supplying troops, on the other hand.

“Old” Europe and the French are not. They seek only profit, having enjoyed the previous situation, which strategically tied down significant U.S. strength in containing this mass-murderer, while they supported him and profited illegally, getting cheap oil. We have taken tough action to address the situation, but this is how strategic realignments take place. They have long-term benefits but significant short-term costs.

Some day in Baghdad, there will be a monument to George W. Bush, in remembrance of the man who pushed for this short-term sacrifice, a monument raised by the people of Iraq, by those who understand what has happened — as opposed to the cynical among us who don’t. We knew this would be a long-term commitment. There is no need to create a straw man saying that we suddenly want to cut and run, because we don’t. No matter how much we might complain about our commitment, we will honor it.

Mr. de Borchgrave need only wait. The United States and its allies will create a new Iraq, and the Old Europeans in France will carp, at least until their electorates throw out the corrupt elite that’s doing the carping about this and everything else the rest of the world is doing. There will be no European Union of consequence, not led by France, anyway. Give it up, already: We’re paying for this operation in blood and treasure; there is no need to cater to a corrupt elite that does not even have the support of its own people.

Yet Mr. Bush does, and the election of 2004 will demonstrate this clearly. The American people support this effort, and not because we seek an empire, as corrupt French elites still do. We actually look to good in the world, which is a foreign concept to those corrupt elites, whose only thought seems to be how to defy the Anglo-Saxons, as well as what they consider to be the “untermenschen” to their east. Forget Old Europe; it contributes little other than extending its hands to be greased. It cares not how many Americans die — or Iraqis, either — as we have seen for decades.

ROB McEACHERN

Canton, Mich.

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