A Move in Violation of Free-trade Principle: Analysis

Home>>Opinion

Last updated at: (Beijing Time) Thursday, March 07, 2002

A Move in Violation of Free-trade Principle: Analysis

what behind Bush's move is just to play politics and the pressure of US steel makers irrespective of its violation of the principle of world free trade, hence fusing wide protests in the US and throughout the world.

DISCUSSION

CHINESE

SEND TO FRIEND

The US President Bush announced March 5 that that starting from March 20 he is going to impose a 30 percent tax on steel imports apart from clamping down on imports of thick steel plates to protect US's steel industry. But what behind Bush's move is just to play politics and the pressure of US steel makers irrespective of its violation of the principle of world free trade, hence fusing wide protests in the US and throughout the world.

As things stand in the US, the Bush administration's move has been taken in a situation there has already been a decline in the country's steel imports. According to US Commerce Ministry's statistics, last year US steel imports totaled 27.40 million tons to show a drop of 7.1 percent. Analysts say the US has its steel problems mainly in the country itself. One is because of many small high-efficiency steel mills nibbling away at the markets of big ones and less cost by the former than the latter. Two is a heavy burden of over 600,000 retirees weighing on the latter.

Limiting steel import will certainly bring greater "loss" than benefit to the US when taking account of the US economy as a whole and the country's employment situation. For the present, the US has merely 160,000 steelworkers but over 12 million are employed on the country's steel consumption lines. When a 20 percent tax should be imposed on steel imports it could provide only 9000 jobs in the US. What to be followed would be over 74,000 jobs lost in steel consumption. The US government will have to put off the work for a restructuring of its steel industry not to say a raise of steel price and increased spending by US steel users.

A view generally held in the US is that Bush's move is politically oriented irrespective of his protectionist protests to protect the US's steel industry. Not excluded also are the votes of steel-producing West Virginia and Pennsylvania that decide. New York Times in its March 5th commentary pointed out bluntly that without West Virginia's votes dominated by Democrats in 2000 going over to Republicans Bush would still be at Austin, capital city of Texas. A fact of note is that the US Congress is going to have by-election this year in the way to decide whether Democrats or Republicans are going to be in control. Political strategists hold that there remain six seats in the US House of Representatives depending on Bush's decision and these are just those of Republican-controlled M.H.R. seats as they are against Democrats at the House of Representatives.

Bush's decision has met without doubt strong protests of steel consumers and importers in the US. Calman Cohen, President of US Emergency Committee for American Trade (ECAT) denounced Bush's decision as "the worst of all possibilities". Analysts pointed out that US's limitation on steel imports contradicts the country's capacity displayed as a "leadership country of free trade". Bush's move is by itself a heavy blow to the international trade system and is going to seriously affect the normal conduct of world trade.

By People's Daily Online

Questions?Comments? Click here

China Rebukes US for Its Decision to Raise Tariffs on Steel Imports

Governments of S. Korea and Japan to Counteract US Tariff Action

Bush Risks Trade War Over Steel Tariff