Dec. 17, 2003
The Bush Administration tried to camouflage its 180-degree
reversal of its tariffs on imported steel with happy talk about an
improved economy and efficiency efforts by the domestic steel industry.
But nobody's fooled; the Bush Administration ceded control of U.S.
trade policy to a bunch of bureaucrats in Geneva who meet and decide in
secret, and from whose ukases there is no appeal.
Regardless of whether one sides with the steel producers in favor
of tariffs on imported steel, or with the steel consumers who want
cheap imported steel, we have to cringe at how the United States was
humiliated. The Bush cave-in means a significant loss of American
sovereignty to govern our own affairs.
If the SAT test hadn't abandoned its section on analogies, here is
one that could have been used on the next exam. Marbury v. Madison is
to making the Supreme Court the final arbiter of the Constitution as
the Bush surrender on steel tariffs is to making the World Trade
Organization (WTO) the final arbiter of U.S. foreign trade.
Bush imposed his steel tariffs 20 months ago with the promise they
would last three years. He lifted the tariffs on December 4 to take
effect immediately, not gradually, and without any government aid for
the 187,000 steel workers and the 600,000 retired steel workers and
their dependents who rely on the industry for their benefits.
The WTO ruled that our steel tariffs were illegal, and authorized
European and Asian nations to devise $2.2 billion in retaliatory
tariffs against the United States. Our so-called friends in Europe
figured out how to apply the maximum hurtful pressure on President
Looking at the electoral map, the Europeans announced they would
concentrate the $2.2 billion in sanctions against products made in
states Bush needs to win in 2004. The targeted states were North and
South Carolina, where textiles are manufactured, and Florida and the
midwestern states that produce farm products.
That amounts to playing James Carville-style political hardball.
The Europeans must still be gasping at how fast the man they thought
was the Crawford cowboy turned and ran.
The global-economy cheerleaders relished their victory. The New
York Times twice rejoiced in the "raw political fact" that the WTO is
now dictating our trade rules.
Pascal Lamy, Europe's top trade official, gloated: "I am pleased
to announce that all our efforts have worked." Remarking that the
impending $2.2 billion in sanctions were "a tool for compliance," he
condescendingly added that they will now disappear because the
Americans "have complied."
Indeed, one of Bush's senior aides admitted, "Defiance had real
costs." Bush let his trade representative Robert B. Zoellick float the
fiction that the WTO ruling was only a minor consideration.
How did America get in the fix whereby the greatest economic power
in the world was forced to obey the rulings of a bunch of foreign
bureaucrats headquartered in Geneva? The U.S. Constitution grants
Congress the power "to regulate commerce with foreign nations" and "to
lay and collect taxes, duties, imposts and excises."
It happened in 1994 when the 14-page charter for the World Trade
Organization was surreptitiously added to the 22,000-page GATT
agreement (General Agreement on Tariffs and Trade) and scheduled for a
vote on October 5. After receiving thousands of phone calls against
GATT/WTO, President Clinton, Speaker Tom Foley and House Republican
leader Newt Gingrich cooked up an insider deal to reschedule the vote
in a lame-duck session after the November election, when defeated and
retiring Members would be looking for jobs with the big corporations
expected to benefit.
The vote on GATT/WTO bypassed our Constitution's requirement that
treaties must get a two-thirds vote in the Senate to be valid.
GATT/WTO was passed only by a simple majority in both Houses under Fast
Track, a process that severely restricted debate and amendment.
Previous GATT agreements had been contractual relationships
between sovereign nations, in which all members had to agree to any
tariff changes or penalties. The 1994 GATT/WTO agreement locked us
into a sort of Global Supreme Court of Trade empowered to make
unappealable rulings, monitor national responses, compel enforcement of
its decisions, impose sanctions and fines, and authorize retaliation
against disobedient nations.
President Bush tried to mollify the steel workers by saying he
would continue pressing other nations to stop subsidizing their own
inefficient steel producers. That's a tacit admission that free trade
forces American workers to compete with low-wage-no-benefits foreign
workers whose industries are subsidized by their governments.
There is a fundamental difference between free trade as we know it
in the great common market we enjoy in the United States, and the
global free trade that is the goal of GATT/WTO. Our country survived
the transfer of industries from the Rust Belt to the Sun Belt, but
forcing American workers to compete with the pitifully low wages paid
in the rest of the world is a very different matter.