U.S. catfish farmers celebrate - but for how long?
Domestic steel lobbyists want war - with Turkey
Bush's State of the Union message: A missed opportunity
February,
2003: Players Who’s Up To What
By Greg Rushford
Published in the Rushford Report
U.S. catfish farmers celebrate—but for how long?
The Catfish Farmers of America had reason to cheer last month in the wake of Assistant Commerce Secretary Faryar Shirzad’s January 27 announcement of his intention to slap on punitive antidumping tariffs ranging from 38- 64 percent on Vietnamese catfish. As the Associated Press’ Tini Tran reported from Hanoi, the price of Agifish, Vietnam’s largest catfish producer, “dropped by almost 5 percent” the next day on the Vietnam stock exchange.
The American catfish farmers will be celebrating their good fortunes in Destin, Florida on Feb. 20-22, when they meet for their annual convention at the Hilton Sandestin Beach & Golf Resort. This is perhaps the premier resort along the emerald coast. The Hilton’s promotional literature boasts that it has it all: “a 24 hour indoor heated pool, two outdoor pools, two whirlpools, thirteen tennis courts, three championship golf courses, boating, private beach and health club with sauna, steam room, massage, exercise equipment and classes on property.” Fine surroundings for the poor American catfish processors to commiserate with each other on how Vietnamese sharpies have been picking their pockets.
And after the swimming, golf, sauna and massage, the catfish people can unwind at one of the nation’s finest steak- and seafood houses which happens to be in the Hilton. Seagar’s is pronounced like cigars, perhaps because it features a walk-in humidor that was custom made for the Shah of Iran. But the Buy American crowd might watch out for the menu. While there is no problem with the lobster from Maineand grouper from the Gulf of Mexico, it might be awkward to tuck into Asian Tiger Prawns — could be from Vietnam. Alas, there is no catfish from anywhere on Seagar’s menu.
But the celebration might not last forever. Just as happened in the shooting U.S.-Vietnam war, the American side might come to rue its escalation of the U.S.-Viet Catfish War. Sen. John McCain has recently been to Vietnam and is outraged about the catfish case. McCain chairs the Commerce Committee, which authorizes the budget for the Commerce Department. If the chairman comes to understand just how dishonest Commerce’s non-market methodology in antidumping cases really is — and examples beyond the catfish case that I detail on page two of this issue are legion — he could hold a hearing that would make the bureaucrats sweat. Nobody on Capitol Hill has ever shown the slightest oversight interest in the abuses of the U.S. antidumping regime. The time could now be right — stay tuned.
Moreover, the American catfish protectionists might consider that their enemies are resourceful entrepreneurs who might be energized by the U.S. antidumping action to become even more competitive in world markets. Vietnam’s Agifish, for example, has lately been looking at opportunities for increased sales from Mexico to Hong Kong. In Hong Kong’s Commerce ministry, there are no governmental catfish cops who worry that diners in that great city’s restaurants aren’t paying enough for their fish. Hong Kong has no antidumping regime, and doesn’t want one. Meanwhile, the American catfish processors seem satisfied just to sit back and farm the U.S. government for antidumping tariffs.
Domestic steel lobbyists want a war — with Turkey
The Stand Up for Steel crowd’s latest contribution to U.S. foreign policy is to threaten Turkey with another antidumping suit. Not everyone would see the logic in launching a trade war against Nato’s only Muslim nation at the same time we ask for Turkey’s military support to overthrow Saddam Hussein. But the steel lobby, like the textile lobby, has consistently insisted that its domestic agenda should trump foreign policy.
Washington trade lawyer Roger Schagrin complained about Turkey’s threat to the U.S. steel industry in a January 10 letter to U.S. Trade Representative Robert Zoellick and Commerce Secretary Don Evans. Schagrin represents the Flat-Rolled 201 Coalition, which includes Gallatin Steel Co., Steel Dynamics International, IPSCO Steel Inc., Weirton Steel Corp., and Nucor Corp. Schagrin’s clients lobbied successfully for President George W. Bush’s Section 201 steel plan that was announced in March, 2002.
Flat-rolled steel is clearly useful stuff; it comes in sheets and ends up in automobiles and appliances like refrigerators. According to Schagrin, too much of it has been coming into this country recently from developing countries like Turkey that were excluded from Bush’s steel tariffs. Mexico, also exempted pursuant to Nafta, also offends Schagrin’s clients.
Schagrin’s letter claimed that the “surging imports” from excluded developing countries are “having a dramatic negative effect on access to capital for his clients. “While Nucor and SDI have issued successful bond offerings since 201 relief, both Nucor and IPSCO have recently had their bond ratings reduced,” he told the Bush officials. “Basically Wall Street does not believe that the Administration will take action against imports from excluded countries and believes that relief is likely to be cut short by reason of adverse WTO rulings.”
On the latter point, Schagrin is most likely correct. Well-informed legal opinion has held from the onset that the Bush steel plan was WTO-inconsistent.
Schagrin bluntly informed Zoellick and Evans that his clients had refrained from filing more antidumping cases while they were enjoying the benefits of the Bush tariff walls. “However, my clients have informed me and have expressly permitted me to share with you, that they have instructed me to prepare unfair trade cases against any increased unfairly traded imports from uncovered countries,” Schagrin declared. The threat was clear: Either you roll back steel imports from countries like Turkey and Mexico, or we will.
Imagine how Secretary of State Colin Powell might put it to the Turks. It is vitally important for you to grant us base rights to wage war against your neighbor Iraq, the secretary might say. And by the way, you are making too much money selling flat-rolled steel to the United States and we are proposing to screw you down.
Schagrin’s proposal that the U.S. government should screw down foreigners who sell us affordable flat-rolled steel doesn’t complain about increased flat-rolled steel imports from the Czech Republic. Seems that U.S. Steel — a bulwark of the Stand Up for Steel lobby — has a partnership interest with in the Czech Republic’s U.S. Steel Kosice. Domestic steelmakers never complain that their own foreign steel is “unfairly” traded.
Bush’s State of the Union message: Swagger, and a missed opportunity
“All free nations have a stake in preventing sudden and catastrophic attacks, and we’re asking them to join us, and many are doing so,” President George W. Bush told Congress in his January 28 State of the Union message “Yet the course of this nation does not depend on the decisions of others.”
On Iraq, Bush added: “We will consult, but let there be no misunderstanding: If Saddam Hussein does not fully disarm for the safety of our people, and for the peace of the world, we will lead a coalition to disarm him.”
Swagger is not a cause of embarrassment to this president. Bush carries a big stick and sees no need to speak softly. But by using his bully pulpit to define America’s national security interests mainly in terms of military power, Bush missed a wonderful opportunity.
In international economics, the course of this nation does depend upon the decisions of others. Our prosperity and the hopes of hundreds of millions of impoverished people worldwide depend on a liberal world trading system. In the World Trade Organization’s ongoing Doha negotiations, for example, the United States does not have anything close to unilateral economic clout. In his speech, Bush might have reassured the world that he really understands the connection between free trade and national security. The president might have put in a line noting that nations which trade peacefully with each other do not go to war with each other. He could have had a couple of lines about the importance of working with our trading partners to tear down protectionist barriers.
