Tuesday, August 16, 2005

Stop this trade war

Our president is speaking double again. In one week he turned from strong trade advocate to protectionist. Three weeks ago Bush put great effort into pushing CAFTA - Central American Free Trade Agreement - through Congress. (I call this a trade agreement, not free trade, because it is not free; it is very managed trade. But it is trade.) Then last week Bush turned around and violated NAFTA by rejecting the ruling against the US in the matter of soft-wood imports from Canada. The ruling by a 3-person arbitration panel requires the US to return the tariffs collected - about $5 billion. How can Bush push new trade agreements when he violates the ones already in place? He pandered to the steel-producing states in 2001 by placing a tariff on imported steel at great cost to manufacturers of steel products and consumers. Now he is doing it again.

We Lose

Homes will be more affordable when this tariff is finally gone. The American Homeowners Alliance estimates that it will reduce the construction cost of a new home by $1,000 on average. That will make about 300,000 more moderate-income families eligible to own. President Bush should welcome the ruling for its benefits to consumers and to the economy. And, incidentally, he should appreciate that the NAFTA trade agreement is working as it should. And to make the bad news worse, the Bush administration is proposing to double the damage to consumers, demanding that Canada impose a tax on lumber exports so prices rise here. I sure don't understand. The Wall Street Journal has an excellent editorial on this on August 15, but it requires a paid subscription.

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