Step Back From Protectionism
The house of representatives last week gave a reminder - as if one were needed - of the increased resistance free trade faces in the United States.
Despite solid opposition by the administration and the GOP leadership, the House voted 289 to 141 in favor of limiting steel imports.
All but 13 Democrats supported the measure, as did 91 Republicans. That's 20 more Republicans than the 71 who opposed giving the president fast-track trade-negotiating authority last year. It's also one vote short of the two-thirds needed to override a presidential veto.
The demand for the bill results from the economic crisis in Asia, Russia, and elsewhere. While American steel companies saw their business fall off in 1998, imports of cheaper foreign steel surged. Imports have cooled somewhat since, but the measure would roll them back to average levels in the three years ending July 1997.
The measure is misguided on several levels:
*It violates US commitments under the World Trade Organization.
*It interferes with the real solution, which is to persuade other countries to open their markets to US products. You can't argue for free trade in one direction while erecting trade barriers in the other.
* While perhaps 10,000 US steel jobs have been lost to imports (certainly a hardship for the workers involved), the quotas would undermine the free trade on which millions of other US workers and farmers depend.
* It will raise consumer prices by some $1 billion over the next three years, according to the Congressional Budget Office.
The US can take measures short of erecting new trade barriers. The administration, for example, has imposed tariffs on Japanese and Brazilian steel dumped on the US market below cost and secured Russia's agreement to limit its exports to the American market.
Protectionism is a short-term fix that leads to long-term problems. It's a major reason the Japanese and European economies have stumbled in recent years.
The White House has threatened to veto the legislation, but it may not come to that. The bill will have a tougher time in the Senate, where the steel industry and unions have less clout.
In the meantime, advocates of free trade should get the message that they must do a far better job of selling the many benefits of trade to the public - and its elected representatives.