Monday, September 14, 2009

Tire tariffs

America's recent decision to impose tariffs on Chinese tire imports isn't as clean-cut of an issue as either its supporters or detractors make it out to be.

First of all, there is nothing inherently "good" or "bad" about tariffs, protectionism, free trade or any other buzzwords of the moment. As Korean economist Ha Joon Chang has amply demonstrated, on their ascent to power, every major industrial state (yes, including Britain) protected key markets and opened them, tightly guarded intellectual property rights and wantonly violated them, and welcomed FDI and restricted it.

The winners and losers in each trade dispute vary, but it would take a market fundamentalists of a utopian variety to argue with a straight face that under absolute free trade "everyone is a winner." A little like some peppy grade school teacher saying that in sports everyone wins because it makes everyone healthy and fills everyone with team spirit. Really? Even the guy who hates to play sports? Or the one who broke his leg? Maybe a bad analogy...

Back to the dispute at hand... some criticize the Obama administration's penalties as "political." As those who make such criticisms tend to make an ostentatious show of noting that few (if any) tire companies supported the tariffs, it is clear that the heart of their argument is this: captains of industry are legitimate actors in trade decisions and not by any means "political," but unions, specifically the United Steel Workers, are not. Unions---and voters more generally---are just interest groups, goes the logic, the sort of folks who are "pandered" to by venal politicians.

On the Chinese side, there's a fair case, too, though. Many in the P.R.C. were rightly angered by the concessions that former Premier Zhu Rongji made to get China into the WTO in the 1990s, concessions that came from a Clinton administration that bombed the Chinese embassy in Yugoslavia around the same time. It is precisely these special conditions that allow the Obama administration to hit China on tires (and steel pipes and other stuff)... but not hit similar "dumping" by other countries.

Young Chinese nationalists do their countrymen a better service by fighting imbalanced treaties---as their forebears during the May Fourth Movement did 90 years ago---than they do by whining about media coverage or defending Chinese colonial policies toward ethnic minorities.

So, where do I fall? Fair to protect your workers (on both sides). Nothing right or wrong inherently about protecting this or not protecting that industry. But unequal treaties are lame.

1 comment:

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