Avoiding a global trade war
22/10/2009 12:00
Vancouver, BC, Canada, — The imposition of various antidumping tariffs on Chinese products has ceased to be surprising news. Such measures indicate that trade protectionism is not likely to end soon.
On Oct. 6, the Council of the European Union announced a decision to impose countervailing duties of 17.7 to 32.9 percent on seamless steel pipes from China. A bit earlier, on Sept. 24, the EU trade committee in one breath approved a series of anti-dumping levies on steel and aluminum products from China and other countries.
The EU has also extended tariffs on shoes imported to EU countries from China, Vietnam and some other countries, for another two years.
Besides the EU, the United States has not hesitated to impose countervailing duties on China. People have not forgotten the China tire issue. Also, the United Steelworkers, the union that pushed the China tire case, again in late September proposed to the U.S. Department of Commerce and the International Trade Administration that another anti-dumping tariff be imposed on copperplate paper imported from China.
Global Trade Alert, an independent trade watchdog, published a report in late September impressively pointing out that member nations of the G20, since their Washington summit last year, had implemented trade barriers on 121 items. The report said moves were under way to add another 134 items to the list by imposing customs barriers, export subsidies or trade restraints. Moreover, the report claimed that 90 percent of commodities around the globe were subject to some type of trade barrier.
Both the European Union and the United States paint themselves as leaders in the fight against trade protectionism. They consistently promote trade liberalization, from time to time blaming other countries for erecting trade barriers, and even threatening to impose sanctions. The G20 summit made a point of opposing all types of trade protectionism.
However, the facts show that most G20 members are generous to themselves but strict with others – demanding “liberalization” from other countries but violating “liberalization” themselves.
For example, the United States complains on one hand about governments that follow exclusive policies in making official purchases; on the other hand, it has its own Buy American Act.
French President Nicolas Sarkozy condemned as cowardly the setting up of tariffs and trade barriers in time of crisis. Nevertheless, he offered loans of more than 6 billion euros for companies like Renault and Citroen and encouraged them to move their branch factories from Eastern Europe back to France to provide local job opportunities.
The EU has announced it will reject what it considers the dumping of China’s seamless steel pipes. But it was not long ago that the EU voiced extreme dissatisfaction over China’s “anti-liberalization” measures in restricting agricultural imports.
The words of the G20 members are still ringing in our ears as a new round of anti-dumping measures has begun. One cannot help but worry whether a global trade war – such as the one brought about by the Smoot-Hawley Tariff Act in the United States in the early 1930s – is at hand.
With the world economy still down in the dumps and unemployment rates high around the world, trade protectionism is seen as a way to reduce the impact from foreign imports, save jobs at home and win support from laborers and low-income families. Hence, politicians naturally try every means to create trade barriers to please their supporters, without concern for the side effects they may cause.
Thus anti-dumping measures have added value and serve political rather than economic interests. Through haggling over such measures, economically powerful countries can force their counterparts to accept conditions the weaker parties were originally unwilling to accept, in exchange for removing the anti-dumping measures.
In the era of globalization, it becomes difficult to separate “you” and “me” when dealing with economic issues. Many imported products that face sanctions are produced in countries with low-cost labor by transnational companies. Thus, customs barriers and tariffs hurt not only the exporters, but also the companies whose capital is invested in the exporting countries.
Meanwhile, many imports targeted by anti-dumping measures are actually high-end products and high-end supporting industries. High tariffs will not only impact the exporter, but also raise costs in some high-end industries, lowering their profits and causing jobs to be lost in the importing countries.
In fact, the politicians in each country are aware of all this, but they cannot refrain from taking such actions for domestic political reasons, to gain people’s support as well as respond to pressure from interest groups.
Consequently, to counteract the harm brought by so-called anti-dumping measures, some countries have no choice but to raise their own protectionist flags and fight poison with poison. For instance, India has complained of being the most injured state in terms of anti-dumping measures since the G20 was established. Yet it is also publicly recognized as the country with the most and the highest tariff barriers.
Although the World Trade Organization has procedures through which nations can appeal against anti-dumping and customs barriers, its process of investigation and adjudication is too fussy and long-winded. Often, when a decision is finally reached, more than half the period of validity of the objectionable measures has already passed. This makes most countries prefer to sit out the measures rather than make a legal appeal.
Looking at the root of the problem, whoever started the trouble should end it. Logically speaking, the United States and the European Union, both occupying big shares in the quantum of world trade and in gross imports, should abandon their trade war logic, put aside zero-sum games like setting up customs barriers, and adhere to the G20 spirit of opposing all types of trade protectionism.
Herein lies the hope that the global community will avoid being dragged into a prolonged trade war, and the resurgence of the global economy will be hastened.
On Oct. 6, the Council of the European Union announced a decision to impose countervailing duties of 17.7 to 32.9 percent on seamless steel pipes from China. A bit earlier, on Sept. 24, the EU trade committee in one breath approved a series of anti-dumping levies on steel and aluminum products from China and other countries.
The EU has also extended tariffs on shoes imported to EU countries from China, Vietnam and some other countries, for another two years.
Besides the EU, the United States has not hesitated to impose countervailing duties on China. People have not forgotten the China tire issue. Also, the United Steelworkers, the union that pushed the China tire case, again in late September proposed to the U.S. Department of Commerce and the International Trade Administration that another anti-dumping tariff be imposed on copperplate paper imported from China.
Global Trade Alert, an independent trade watchdog, published a report in late September impressively pointing out that member nations of the G20, since their Washington summit last year, had implemented trade barriers on 121 items. The report said moves were under way to add another 134 items to the list by imposing customs barriers, export subsidies or trade restraints. Moreover, the report claimed that 90 percent of commodities around the globe were subject to some type of trade barrier.
Both the European Union and the United States paint themselves as leaders in the fight against trade protectionism. They consistently promote trade liberalization, from time to time blaming other countries for erecting trade barriers, and even threatening to impose sanctions. The G20 summit made a point of opposing all types of trade protectionism.
However, the facts show that most G20 members are generous to themselves but strict with others – demanding “liberalization” from other countries but violating “liberalization” themselves.
For example, the United States complains on one hand about governments that follow exclusive policies in making official purchases; on the other hand, it has its own Buy American Act.
French President Nicolas Sarkozy condemned as cowardly the setting up of tariffs and trade barriers in time of crisis. Nevertheless, he offered loans of more than 6 billion euros for companies like Renault and Citroen and encouraged them to move their branch factories from Eastern Europe back to France to provide local job opportunities.
The EU has announced it will reject what it considers the dumping of China’s seamless steel pipes. But it was not long ago that the EU voiced extreme dissatisfaction over China’s “anti-liberalization” measures in restricting agricultural imports.
The words of the G20 members are still ringing in our ears as a new round of anti-dumping measures has begun. One cannot help but worry whether a global trade war – such as the one brought about by the Smoot-Hawley Tariff Act in the United States in the early 1930s – is at hand.
With the world economy still down in the dumps and unemployment rates high around the world, trade protectionism is seen as a way to reduce the impact from foreign imports, save jobs at home and win support from laborers and low-income families. Hence, politicians naturally try every means to create trade barriers to please their supporters, without concern for the side effects they may cause.
Thus anti-dumping measures have added value and serve political rather than economic interests. Through haggling over such measures, economically powerful countries can force their counterparts to accept conditions the weaker parties were originally unwilling to accept, in exchange for removing the anti-dumping measures.
In the era of globalization, it becomes difficult to separate “you” and “me” when dealing with economic issues. Many imported products that face sanctions are produced in countries with low-cost labor by transnational companies. Thus, customs barriers and tariffs hurt not only the exporters, but also the companies whose capital is invested in the exporting countries.
Meanwhile, many imports targeted by anti-dumping measures are actually high-end products and high-end supporting industries. High tariffs will not only impact the exporter, but also raise costs in some high-end industries, lowering their profits and causing jobs to be lost in the importing countries.
In fact, the politicians in each country are aware of all this, but they cannot refrain from taking such actions for domestic political reasons, to gain people’s support as well as respond to pressure from interest groups.
Consequently, to counteract the harm brought by so-called anti-dumping measures, some countries have no choice but to raise their own protectionist flags and fight poison with poison. For instance, India has complained of being the most injured state in terms of anti-dumping measures since the G20 was established. Yet it is also publicly recognized as the country with the most and the highest tariff barriers.
Although the World Trade Organization has procedures through which nations can appeal against anti-dumping and customs barriers, its process of investigation and adjudication is too fussy and long-winded. Often, when a decision is finally reached, more than half the period of validity of the objectionable measures has already passed. This makes most countries prefer to sit out the measures rather than make a legal appeal.
Looking at the root of the problem, whoever started the trouble should end it. Logically speaking, the United States and the European Union, both occupying big shares in the quantum of world trade and in gross imports, should abandon their trade war logic, put aside zero-sum games like setting up customs barriers, and adhere to the G20 spirit of opposing all types of trade protectionism.
Herein lies the hope that the global community will avoid being dragged into a prolonged trade war, and the resurgence of the global economy will be hastened.
By Tao Duanfang
(Tao Duanfang is a Chinese media critic living in Vancouver, Canada. This article is translated and edited from the Chinese by UPI Asia.com; the original can be found at http://nf.nfdaily.cn/nfdsb/content/2009-10/07/content_5937233.htm. ©Copyright Tao Duanfang.)
(Tao Duanfang is a Chinese media critic living in Vancouver, Canada. This article is translated and edited from the Chinese by UPI Asia.com; the original can be found at http://nf.nfdaily.cn/nfdsb/content/2009-10/07/content_5937233.htm. ©Copyright Tao Duanfang.)
Published: October 21, 2009
Source: www.upiasia.com
Source: www.upiasia.com
Các tin khác
- Rising global shipping costs put pressure on Viet Nam’s seafood exporters (22/06/2026)
- India likely to retain anti-dumping duties on Bangladeshi jute products (22/06/2026)
- Japan slaps anti-dumping duties on Chinese, Taiwanese steel (22/06/2026)
- India initiates anti-dumping probe against a Chinese, Japanese chemical used in tyre, rubber items (22/06/2026)
- Reasons why the US continues to suspend customs clearance for Vietnamese trailers (22/06/2026)
About Us
