Trade Policy Stinks (and Not in a Good Way)

Katherine Mangu-Ward | March 16, 2009

Semi-good news for lovers of cheese and free trade: The U.S. Trade Representative's office has announced that a looming 300 percent tax on Roquefort will be postponed for a month, and possibly done away with.

Prices were already inflating in anticipation of a March 23 deadline, courtesy of a parting gift from the Bush administration, which slapped the tax increase on the stinky blue sheep's cheese as part of a spat with France over importation of American beef.

Even if a deal is reached and the Roquefort is allowed to roam free, delighting cheese lovers of many nations, the whole hullabaloo highlights how ridiculous international trade negotiations can be, with countries running to the World Trade Organization to "tell" on each other for being unfair. Consider this fairly normal back-and-forth, as reported straight by Reuters:

The European Union banned U.S. and Canadian beef in 1988 because of fears growth hormones fed to cattle by U.S. and Canadian farmers could cause cancer.

The United States and Canada complained to the World Trade Organization, which agreed the ban was not supported by scientific studies. The WTO battle has continued.

The United States was allowed to impose sanctions worth $116.8 million per year on EU goods starting in July 1999.

The Bush administration changed the list of products facing duties just before leaving office in January, adding meat, chewing gum, chocolate, certain jams, and some fruit. Mineral water and chestnuts from France were added, and the duties on Roquefort cheese were to be hiked to 300 percent.

Last month, I got an email from my favorite cheese-monger, Jill Erber, at Cheesetique in Alexandria, Virginia. She sums things up perfectly:

Obviously, Roquefort is a TEENY TINY portion of imported food in the US, so why pick on this poor little cheese and, by association, the 600-person town of Roquefort? It’s called symbolism, my friends. Roquefort, like foie gras and truffles, simply says, “France”.

Why do I focus today on this seemingly insignificant example of protectionism at it worst when there are such large-scale issues to consider in our tumultuous time? For that reason exactly. There are so many huge examples of economic policies gone awry, totaling billions and trillions of dollars, and for that very reason, I point out this easily identifiable, but no less extreme violation of the American ways of free choice and trade.

Comments

Anonymous|3.16.09 @ 7:22PM|#

The United States and Canada complained to the World Trade Organization

The first step is to stop legitimizing GATT as a court. Then you can roll around in your stinky cheese produced by stinky people across the sea.

Ike|3.16.09 @ 7:22PM|#

Donkey raping cheese eaters.

ed|3.16.09 @ 7:36PM|#

Another reason why governments have no business regulating trade. How does punishing the American stinky-cheese-eaters benefit the American cow-makers? If Americans were really pissed off at the French, they'd boycott their goods voluntarily.

|3.16.09 @ 7:41PM|#

It'd be nice if the FDA allowed Gour Noir into the country, like they used to. The best damned cheese I've ever had.

robc|3.16.09 @ 7:55PM|#

I think trade is an example where the tit-for-tat gaming theory doesnt work.

ed|3.16.09 @ 8:00PM|#

I usually don't do this, but it seems appropriate:

THE CHEESE ALARM (Robyn Hitchcock)

Roquefort and grueyere and slippery Brie
All of these cheeses they happen to me

Rough pecorino and moody Rams Hall
Stop me before I just swallow it all
Oh please, Somebody ring the cheese alarm

Goats' cheese cylinder, tangy and white
Roll over me in the flickering night

Chaume and Jarlsberg, applewood smoked
"The pleasure is mine," he obligingly joked
Oh please, Somebody ring the cheese alarm

Hey now, Fletcher, don't keep me up late
I can't even fit into size thirty-eights

Juddering Stilton with your blue-blooded veins
You can't build a palace without any drains

Half the world starving and half the world bloats
Half the world sits on the other and gloats

Truckle of cheddar in a muslin rind
Would you give it all up for some real peace of mind?

I want to buy some cheese.|3.16.09 @ 8:09PM|#

Shouldn't this stuff be banned for being fatty and generally good tasting. So why worry about slapping a tariff on it when you can just ban it!

Okay, maybe not the last part.


And now on to more important things:
http://www.youtube.com/watch?v=B3KBuQHHKx0

Shannon Love|3.16.09 @ 8:56PM|#

One does have to wonder what would happen in a world in one country imposed no trade restrictions but all the rest did. Britain was pretty much in that circumstance in the 1800's but they had the big stick of carrying the majority of the world's oceanic trade in British vessels.

I think the urge to retaliate on trade has more to do with a generically programmed sense of fairness than it does an intellectual understanding of the consequences. People trying to sell to protected markets feel abused when there is no reciprocation.

|3.16.09 @ 8:58PM|#

Blessed are the cheesemakers.

|3.16.09 @ 9:13PM|#

...for they shall be called sons of Curd.

Alan Vanneman|3.16.09 @ 10:03PM|#

Um, so what's the point? We shouldn't ban other countries' products but they should be free to ban ours? Or, rather than "telling" on countries that practice unfair trade policies, we should, you know, bomb them?

I don't know why a dispute over the exclusion of U.S. and Canadian beef from the E.U. should be considered a "spat". Perhaps in the future the U.S. should ban non-humorous, non-smelly items, like galvanized wire and non-ferrous metals, to avoid the wit of Katie M-W.

|3.16.09 @ 10:19PM|#

We shouldn't ban other countries' products but they should be free to ban ours?

Yes. That's the point.

When the US receives gracious permission to punish American consumers because the EU was found guilty of punishing European consumers, it would be better if the US simply put that judgment in its pocket rather than go ahead and punish American consumers.

|3.16.09 @ 10:29PM|#

MikeP,

It's not that simple. You're ignoring the other half of the equation, in which the EU's actions also harmed American meat producers in addition to European consumers.

|3.16.09 @ 10:30PM|#

Three secrets to a long and happy life: healthy diet, regular exercise, and boring cheese.

|3.16.09 @ 10:47PM|#

But, except for very narrow corner cases, trade restrictions invariably cost consumers more than they benefit producers.

And with retaliatory trade restrictions, the injury is wonderfully enhanced by the insult of applying it to a completely different set of consumers for the sake of a completely different set of producers.

|3.16.09 @ 10:50PM|#

Also, an update to the story that Katherine mentioned before about Mexican trucks, and how Congress fulfilled an Obama campaign promise (and bills that he sponsored as a Senator) to kill the pilot program. Seems that Mexico's slapping sanctions on US exports in retaliation.

|3.16.09 @ 10:59PM|#

Perhaps I'm not clear on this. I don't think this actually picks on those 600 people. What it does do is lower demand for their cheese in the U.S. and create a tiny surplus in other markets, Iran perhaps. This surplus then leads to lower prices in those markets. Sure, maybe the 600 people will make marginally less money but not enough to force them to change an EU decision.

To sum it all up, taxing the stink out of French cheese royally screws Roquefort eating U.S. consumers while putting a minor dent in the pocket of the French cheese makers and subsidizing Iranian cheese consumers. Well, it's ok by me as I prefer a nice Stilton anyway, but it really is a contrived way to reach out and mend fences with Iran.

|3.16.09 @ 11:46PM|#

What's that wonderful smell you've discovered?

Shut down all the garbage smashers on the detention level!!!

|3.17.09 @ 1:39AM|#

Stupid is as stupid does. I'm all for unilaterally (no really, completely unilateral, no matter what tariffs some yahoo Europeans want to levee) removing import tariffs. But as to Jill Erber's sudden affection for free trade: does it extend to "hormone-laden" US beef? Or is this more a case of a 'holy shit, my favorite little niche is being affected' revelation? I mean any port in a storm and all and I welcome her to the HMS Free Trade, but will we see her submitting passionate defenses of "hormone-laden" US beef being exported to Europe when her particular hobby-horse is no longer being gored, or will she then be on the opposite side of the barricades?
-K

Seward|3.17.09 @ 7:01AM|#

crimethink,

It doesn't matter what the E.U. does or any other country or group of countries for that matter. When we practice free trade we reap benefits whether other nations practice free trade or not. When most politicians generally talk about free trade they tend to act like there is some need to extract concessions from another nation for free trade to work; when nothing of the sort is required. Some of why this is the case is related to the Ricardian theory of comparative advantage.

|3.17.09 @ 8:01AM|#

The European Union banned U.S. and Canadian beef in 1988

The what did what when?

Gilbert Martin|3.17.09 @ 9:29AM|#

"When the US receives gracious permission to punish American consumers because the EU was found guilty of punishing European consumers, it would be better if the US simply put that judgment in its pocket rather than go ahead and punish American consumers."

Yes.

The supporters of protectionism try to spin the notion that the economic self interests of producers, labor unions, etc. are somehow of more national importance than the economic self interests of consumers.

They aren't.

|3.17.09 @ 10:43AM|#

Perhaps the route to take is to fine the government that imposes the tariff, and seize assets if necessary to collect the fine.

Really, are you are doing is gaining restitution of amounts wrongfully collected (the tariff) from the state that collected it.

I would purely love to see the US board and seize a French naval vessel to collect a judgment.

|3.17.09 @ 11:53AM|#

This is only slightly off-topic:

"Mexico said it would increase tariffs on 90 industrial and agricultural goods, likely to include politically sensitive farm products, after Congress last week killed a pilot programme allowing a limited number of Mexican trucks on American highways. Mexico obtained a judicial ruling in 2001 under the North American Free Trade Agreement (Nafta) allowing it to impose such sanctions, but has held off since the US introduced the pilot scheme."

Isn't that nice. Thank you Obama for standing up for 'Merican truck drivers over those inferior Mexican drivers and trucks. 'guess rednecks come in all colors now.

http://www.ft.com/cms/s/0/ce2431c4-126b-11de-b816-0000779fd2ac.html

jester|3.18.09 @ 10:47PM|#

I smuggle cheese regularly. It's the American way.