Dec 042003
 
Authors: Jason Kosena

The United States averted a major global war Thursday.

Weapons of mass destruction and the threat of terrorism were not

to blame for this war. This war would have pitted America against

Europe, China and Japan, to name a few.

It wasn’t going to be fought in the name of patriotism or for

democracy. The major global war the United States avoided this week

was over citrus oranges and steel… a trade war.

President Bush decided Thursday to lift the steel tariff he

imposed in March of 2002. This decision to allow foreign steel to

enter the U.S. market tariff-free will most certainly have a

negative political effect for his re-election bid next year with

voters in the Rust Belt states, including steel-producing states

Pennsylvania, West Virginia and Ohio.

By placing a tariff on foreign steel, the administration ensured

domestic steel prices would remain inflated.

The tariff stopped steel-producing countries like China and

Japan from flooding the U.S. market with cheaper steel and

effectively allowed domestic steel companies to survive.

This was good news for the Rust Belt in 2002 because its economy

is largely based upon steel production so it helped Bush

politically. It also hurt him politically in states that buy steel

for industry and manufacturing purposes, namely Michigan, where

automakers and automobile parts factories are huge players in state

economics.

On the international level, it was seen as a break of good faith

to the countries within the World Trade Organization, which is

where the European Union and its allies against America enter.

The WTO established a free trade network among countries within

its ranks. But because companies in China and Japan produce steel

for a relatively cheaper price than U.S. companies, the American

steel industry lobbied heavily for the steel tariff to stay in

business.

This March a three-judge panel in the WTO voted against the U.S.

tariffs, ruling they broke international trade rules by not fairly

allowing the free trade of steel with other countries.

In response, the EU threatened the United States with $2.2

billion in tariffs of its own against exported U.S. products. This

is where the trade war, or war of tariffs on each other’s exported

goods, began to emerge.

It became worse politically for Bush when the EU attached

tariffs to citrus oranges, a huge moneymaker for Florida’s economy,

and textiles, a huge moneymaker in the Carolinas. This is how the

EU, China and Japan pushed President Bush into a corner,

politically.

Bush won Ohio and West Virginia, two traditionally Democratic

and steel-producing states in 2000. He lost Michigan, a

steel-purchasing state, and needs to win the Carolinas and Florida

badly in 2004.

Bush didn’t want to have to explain to voters in politically

critical states that he felt the steel industry’s sustainability

was worth the lost revenue their states would incur from the

tariffs the EU was threatening to put on exported goods.

And, because the Steel Workers of America have backed

presidential hopeful Sen. Richard Gephart (D-Missouri), the

decision to protect textiles and citrus oranges over steel was an

easy one to make. Not to mention, by dropping the steel tariff Bush

gained political support in Michigan.

What is surprising about this entire political soap opera is the

power the EU has on the world politics stage. After the formation

of the EU, the United States is no longer alone as the only major

superpower in the world.

Yes, it is true the EU is still in need of much growth before it

can rise to the level of military prowess of the United States. But

the fact it can sandbag trade decisions in the United States and

dictate foreign policy resolutions is an important demonstration of

its power that people shouldn’t ignore.

Since the 1988 fall of the Soviet Union, the United States has

enjoyed a ride as the only world power in forming international

policy. It is in the forefront of NATO, the U.N., the WTO and many

other international agencies and agreements over the past 60 years.

But America is no longer the only power leading the way.

America’s entrance into the WTO, compiled with many other

binding international agreements, has made its ability to be a

unilateral, independent nation impossible. Despite the rhetoric of

many government officials on both sides of the aisle, the United

States is more dependant upon the other nations of the world than

ever.

So the next time you hear someone say “we don’t need their

support, we’re America,” about another country or region, just

remember how citrus oranges and steel changed world trade policy

and the lives of many Americans this week.

 

Jason is a senior journalism major. He would like to dedicate

this column to his brother Brian J. Kosena.

 Posted by at 5:00 pm

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