November, 2001: Players

By Greg Rushford
Published in The Rushford Report

America changed on September 11. American protectionists did not.

The Sept. 11 terrorist atrocities brought out the best in Americans. Well, not everybody. While American soldiers have been sent into harm’s way in tough corners of the world, back home America’s protectionist lobbies have been busy doing their usual — looking out for themselves.

The U.S. sheep lobby has been up in arms because Safeway continues to buy (delicious) lamb from New Zealand. The California-based national chain of grocery stores was hit last month by letters, e-mails, and whining telephone calls complaining about foreign lamb. Texas’ agriculture commissioner, Susan Combs, was particularly distraught. “Especially now, when our country’s economy could use a boost, buying American is an important show of national pride and support,” Combs declared. “I want to remind consumers that America is under attack and not New Zealand.”

U.S. textile fixers were also busy. Shortly after the Sept. 11 attacks on the World Trade Center and the Pentagon, lobbyists from the American Textile Manufacturers Institute sidled up to Capitol Hill to tell lawmakers of their concerns that American soldiers might have to face Osama bin Laden naked. “The American textile industry is a key supplier to the U.S. Armed Forces, providing 13,000 different items for their use,” ATMI’s website announced to its members. “Contact Congress to let them know that, in spite of the industry’s current economic hardships, we stand ready to meet the needs of our military in the war on terrorism.” ATMI’s way of helping the military fight the war is Buy America laws, which exclude foreigners from bidding on contracts. The fact that these laws force the Pentagon to divert money from the purchase of weapons to buy higher-priced domestic clothing is not part of ATMI’s national security equation.

ATMI top lobbyist, Carlos Moore, one of this city’s legendary backroom operators, declined to take questions on the Buy American racket. Perhaps he was too busy trying to slip something called the Textile Industry Revitalization Program into the $100 billion economic stimulus package that Congress is considering. Moore is not talking publicly about exactly what the bailout would entail.

ATMI also has its own foreign policy, the purpose of which is to undermine U.S. foreign policy as set by the State Department. Take Pakistan, America’s most fragile ally.

Although Pakistan is something less than an economic powerhouse, ATMI has long been afraid of the Pakistanis. Seems that poor Pakistan has somehow managed to sell Americans nearly $2 billion annually in recent years: cotton yarn, towels, and sheets. So ATMI spent much time last year in an unsuccessful effort to deny preferential trade treatment under the GSP benefits program to Pakistan (along with India, Egypt and South Africa). Moore, who is said to be retiring soon, has devoted his professional life —with no outward sense of shame — to beating up on poor countries, while supporting high tariffs and quotas that drive up the cost of clothing for Americans. His justification for picking on countries like Pakistan and India was that their own markets were closed — which is like Madonna complaining that Pamela Anderson is not a virgin.

On September 26, ATMI president Charles Hayes wrote Commerce Secretary Donald Evans, whose department administers textile quotas. In his letter, Hayes attempted to sound generous, offering to support duty-free entry “for hand-knotted and hand-hooked floor coverings from Pakistan (ordinary people call them rugs). This could be worth $100 million annually to Pakistan, Hayes estimated. “The United States could also defer for six months any quota calls against import surges, no matter how warranted, from coalition members that are fully supporting our efforts against terrorism.”

How generous. Rugs from Pakistan are taxed at only about two percent. We are talking about rugs made in Peshawar by refugees from Afghanistan. Yet ATMI worries that in six months there might be a surge of imports from war-torn Pakistan that would warrant a U.S. crackdown.

ATMI’s Moore did not return an e-mail asking if he would support lifting all quotas and tariffs on all coalition allies that need more access to U.S. clothing and textile markets — key coalition countries with dicey economies and serious problems with radical Islamics like Pakistan, India, Egypt, Indonesia, Turkey, and the Philippines.

Of course, when it comes to lining up at the trough, the farm lobby has some of the biggest hogs in America.

Ignoring warnings from the White House that this is hardly the time to inflict unnecessary federal spending on a weakened economy, the House of Representatives passed a “Farm Security Act” last month aimed at piling on an additional $49 billion in subsidies over the next ten years. That’s on top of the current $26 billion annual farm subsidies, which used to shock people. This legislation is a testament to the political clout (and money) of cotton, sugar, grains, soybeans, and peanuts.

The reference to “security” in the farm bill was inserted this summer before Sept. 11, referring to traditional notions of economic nationalism. But after Sept. 11, the farm bill was portrayed as a national security tool in the war against terrorism.

“It is imperative, especially during this time of crisis, that we protect our American producers and keep our country’s agricultural industry strong,” said Rep. Larry Combest (R-TX), who chairs the agriculture committee. Combest worked on the farm bill with Democrat Charles Stenholm (D-TX) in perfect bipartisan pork harmony.

Meanwhile, while U.S. sailors shipped out, the domestic shipping lobby got busy working their inside connections.

Rep. Curt Weldon, a Pennsylvania Republican, responded to Sept. 11 by inserting a rider to the Defense authorization bill that would require imported automobiles from Europe and Japan to use U.S. flag vessels. Weldon cited national security for his cargo preference proviso — a thin disguise for the fact that his real preference is for the U.S. shipping cartel.

The steel lobby, of course, was as usual the most blatant abuser of Sept. 11 On Sept. 28, Bethlehem Steel, United States Steel, Nucor (now a familiar name on the list of chronic whiners) and five other U.S. mills filed a petition with the U.S. Department of Commerce accusing 20 foreign countries of “dumping” cold-rolled steel in U.S. markets.

Among the countries the domestic industry wants Uncle Sam to launch trade wars against are NATO coalition allies Belgium, France, Germany, Turkey, and the Netherlands, and also Russia, Australia, China, India, Korea, and Japan — all countries that Washington is asking to make serious sacrifices to help hunt down bin Laden.

Bethlehem Steel went into bankruptcy last month, in large part because orders from important customers in the automobile and heavy equipment industries have dried up since Sept. 11. Bethlehem’s economic answer to that is to file a dumping case that will drive up the costs of steel for its same domestic customers. Duh. It makes sense if you are addicted to the antidumping laws.

America changed on Sept. 11, but U.S. trade
policy has not caught up

Since Sept. 11, The Bush administration — from President George W. and Secretary of State Colin Powell to U.S. Trade Representative Robert Zoellick — has spoken eloquently about the connection between national security and free trade. Wonderful talk. But when will official U.S. trade policy show that the administration is going to walk the walk?

USTR Zoellick has worked hard to launch a new round of WTO free-trade talks this month. But Zoellick’s position on eliminating farm subsidies that distort world markets is the same as predecessor Charlene Barshefsky’s: He is asking Europe and Japan to cut their farm subsidies and let American agricultural products into their markets. But Zoellick is not eager to negotiate an end to U.S. agriculture subsidies, even including such embarrassments as the U.S. sugar program.

Like his predecessor, Zoellick is going to the WTO defending U.S. antidumping laws, no matter how this rubs nerves raw with our trading partners and coalition allies.

The European Union announced a generous preferential trade package for Pakistan last month, removing all tariffs on clothing and increase quotas for Pakistani textiles and clothing by 15 percent. U.S. officials responded by refusing to comment.

When I called Zoellick’s office to ask if the U.S. would be willing to grant countries like Pakistan, Indonesia, the Philippines, Egypt, and Turkey duty-free treatment on clothing, spokesman Rich Mills said he had “no guidance” on that. Mills referred me to the National Security Council in the White House, where U.S. trade policy is made.

NSC spokesman Michael Anton said that he would get back with an answer before this issue went to press. But he didn’t.

It’s one thing to wage war against Osama bin Laden. But asking U.S. officials to take on the likes of textile lobby luminaries Sens. Jesse Helms and Fritz Hollings is apparently still too scary.

America changed on Sept. 11, but Patrick Leahy did not

Considering the fact that Islamic radicals have been threatening the lives of Americans in Indonesia, most Americans would assume that at least U.S. military officials are working closely with their Indonesian counterparts since Sept. 11 to provide the needed security. Think again.

As I reported two months ago, American military officials have been unable to forge the necessary close ties with their Indonesian counterparts, thanks to restrictions imposed at the behest of one senator. In November 1999, Sen. Patrick Leahy attached an amendment to the Foreign Operations Appropriations measure meant to punish the Indonesian armed forces for their role in atrocities in East Timor. The idea behind Sen. Leahy’s amendment was to isolate the Indonesian military by severely restricting their contacts with American Armed Forces. But as things have turned out, while the Indonesians were insulted, it is the American military that has ended up being isolated. In the meantime, the Indonesian military has evolved into an important player in the country’s moves toward a genuine democracy.

Last month, East Timor’s foreign minister, Nobel Peace Prize winner Jose Ramos-Horta, spoke here at an off-the-record luncheon hosted by the International Republican Institute. I asked the foreign minister what he thought of the Leahy amendment. He agreed to go on the record.

Ramos Horta replied that Indonesia “has changed” and that new Indonesian President Megawati and her generals are showing good faith. “We must re-engage Indonesia’s military in dialogue,” he declared.

When I asked directly if the Leahy amendment has outlived its usefulness, Ramos-Horta said diplomatically that he could only speak for himself. “It is not for me to encourage punitive acts to a country that is showing good faith to us,” he said. “Indonesia needs some gestures, including the military.”

I sent a note to Sen. Leahy telling him what Ramos-Horta had said about his amendment. The senator declined to comment.

Stay tuned.

TOP