America's size and prosperity have made it the largest consumer of imported products in
the world. Brightly lit shopping malls adorned with the latest foreign-made apparel,
gadgets and trinkets, testify to the vast selection of goods available for purchase.
There is a dark side to this enormous quantity of choices: a hefty price tag - the
federal deficit. Unfair trade agreements, and, predatory pricing strategies and
practices from abroad, placed those goods on the store's shelves. The United States
Trade Representative (USTR), who is directly responsible to the President and Congress
for trade negotiations; is forecasting a two hundred billion-dollar trade deficit for
fiscal year 1996. The American people must demand reciprocal trade agreements for
overseas business competitors. Complimentary trading would; put an end to subsidized
dumping, curb the loss of manufacturing jobs, and, tear down the barriers associated with
free trade.
The practice of selling items at a price less than what it costs to make them is called
dumping. Foreign governments subsidize the manufacturing processes of certain industries
so their companies can displace the competition's industry. The television industry is a
perfect example of subsidized dumping. The post World War II infusion of subsidized
Japanese-made televisions, terminated the United States(U.S.) television manufacturing
industry. In the late 1950's, half a million units crossed our borders, tax and tariff
free. These television sets were made using cheaper components and cheaper labor.
However, the cost of transportation, which would normally escalate each individual price,
was paid for by the Japanese government. The pioneering inventors of the electronic
marvel were forced out. No longer able to compete by meeting rapidly declining prices,
companies had to stop production, liquidate all available assets, and release their
entire work force.
Unemployment figures for 1996 are predicted to be at seven percent (USTR, 1996.) This
equates to nearly twenty million skilled American workers without jobs. The math is
simple; imports cost an economy jobs, exports produce jobs. Reciprocal trading contracts
would definitely curb the exponential loss of manufacturing jobs.
Trade barriers are the largest problems facing American companies in overseas markets.
The obstructions are sometimes overt, sometimes hidden and usually extremely complex.
Deals are covertly impeded with complicated licensing and import procedures. Regulations
concerning special specification standards and testing of American goods are hurdles
deliberately enacted to block fair trade. If foreign governments were mandated to treat
American businesses the same way native companies were treated, free commerce would truly
be achieved.
The U.S. has used an arsenal of tools to try to mitigate unfair trade practices and
enhance U.S. access to overseas markets. These include: Section 301 of the 1974 Trade
Act - Section 301 serves as the flagship of the President's fleet of trade remedies aimed
at unfair trade practices. It calls on the USTR, subject to the specific direction (if
any) of the President, to enforce U.S. rights under any trade agreement. It also allows
the USTR to respond to any act, policy, or practice of a foreign country or
instrumentality that is unjustifiable, unreasonable, or discriminatory and that burdens
or restricts U.S. commerce.
Under Section 301's broad mandate, the USTR may take any appropriate and feasible action
to enforce U.S. trade agreement rights or eliminate trade practices unfairly burdening
U.S. commerce. If the foreign country does not modify its practices, the USTR may deny
it U.S. trade benefits or impose duties, fees, or other import restrictions upon that
nation's goods or services. Under Section 301, retaliatory action has been taken by the
U.S. to eliminate unfair trade activities of countries such as Japan as well as European
Community countries. In other cases, its credible threat has been sufficient to achieve
market-opening, trade-liberalizing results without imposing sanctions. Unfortunately, it
is seldomly used. In most instances, Section 301 is used only as a last resort when all
other available remedies have been exhausted. Often, bilateral negotiations and
dispute-settlement procedures under the General Agreements on Tariffs and Trade (GATT)
are used to resolve trade disagreements without resorting to Section 301. For example,
bilateral negotiations have been successful in improving access to Japan's market for
U.S. products, resolving South Korean unfair trade practices affecting intellectual
property rights and insurance, and eliminating tariffs and import bans on several U.S.
items in Taiwan.
Economic principle tells us that free trade or freer trade will mean lower consumer
prices, and, in the long term, job security in a stable, competitive economy. However,
in the real world, the short term world, jobs are threatened by competition from abroad -
no matter how fair that competition may be. The only way to achieve freer trade in the
complex and delicate world of global business, is for the elected officials of America,
to decree reciprocal trade agreements at the international bargaining table. These
agreements will open doors for new economic opportunities in all nations. The agreements
could eliminate all tariffs, reduce or eliminate most nontariff barriers, liberalize
investment practices, cover trade in services, and support efforts at multilateral trade
liberalization. As a result all nations' international competitiveness and living
standards should markedly increase.
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