| 摘要 | Last week’s column produced two critical comments, which I am taking to heart. One pointed out that blaming dryer manufacturers for the price increases that occurred even though there were no tariffs placed on dryers may be missing the point because the retailers could be the real culprits. That’s a fair point, and I should have been clear that was also a credible explanation. The other critic thought, in essence, that I was spending too much time talking about free trade and its benefits and not enough talking about unfair trade and its costs. I am not sure that’s correct, and even if it is, it is unintentional, but in the spirit of fair play, I want to spend some time this week on unfair trade.
Some of you will immediately respond that unfair is in the eye of the beholder—one person’s unfair act is another’s brilliant competitive tactic—and even if we could define the term, unfair trade also provides benefits in the form of lower prices to consumers. As some on the right have argued over the years, why should we care if the Chinese subsidize their exports? That just means we’re getting stuff cheaper at China’s expense. I’ll explain below why that is wrong, but let’s start at the beginning.
In fact, we do know what unfair acts are—at least some of them—because domestic laws and rules set by the World Trade Organization (WTO) have defined them. Some, like stealing somebody else’s intellectual property or breaking someone’s patent to produce a competing product, are obvious, are widely prohibited (though not always effectively), and do not require showing any harm to obtain relief. Others—like, in WTO-speak, non-national treatment (treating the foreigners worse than the domestics in your country)—presume an injured party by definition since discrimination has occurred. And third, there are dumping and subsidies, where relief requires not only establishing the offense but demonstrating that someone has been injured as a result.
There is not enough space to go into all of these in one column, so I will focus on two aspects of the third category. First, dumped and subsidized goods are not simply a bonus for consumers. Dumping and subsidization are tactics intended to alter normal market conditions to provide an edge to the offending producers and increase their market share (and ultimately profit) at the expense of their competitors in the targeted countries. When private companies dump, they are trying to capture a larger share of the market than their normal comparative advantage would give them. When governments subsidize, they are trying to “create comparative advantage” by altering the terms of trade in their favor.
For governments, subsidization is a result of the infant industry argument—the idea that a country trying to start up a particular industry cannot compete with established foreign producers in the short term and, therefore, also needs protection in the short term. Subsidies are the other side of the coin—giving your new industry financial support to enable them to compete. The classic example is various European nations’ extensive subsidies to Airbus. They worked—there would not have been a viable company without the subsidies, but, as the WTO determined, they broke the rules and will ultimately have to pay. Unfortunately, the competitive damage to Boeing has been done and will not be undone by just compensation. (To make matters worse, we are now seeing the same thing in the Chinese mainframe aircraft industry, though success is some distance away.) For Boeing, the dispute settlement process is working—they are winning—but that will not alter the new competitive reality European subsidies created.
Another area where the rules are having trouble keeping up with the perps involves circumvention, which is exactly what it sounds like—efforts by foreign manufacturers to get around duties that have been imposed. The simplest way is to ship your product to a third country, which then exports it to the United States as a product of that country. Oftentimes, this is simply fraud—taking off the “Made in China” label and putting on the “Made in Vietnam” label. Sometimes it is more creative. One recent case involved importing aluminum pallets, which were then melted down and converted to raw aluminum billets. Had the billets been imported directly, they would have been subject to significant antidumping duties. By importing the aluminum in the form of pallets, the importer got them into a different tariff classification and avoided the duties. When they arrived, instead of being sold and used as pallets, they were simply melted back down to their original state, which circumvented the duties.
Some people might not be overly concerned about this. It is an economic crime—nobody is actually hurt they say (This is not true. The U.S. competitor is clearly harmed). But I admit to being deeply offended simply because rules are being broken. We can debate the wisdom of the rules, but once we have them, they ought to be followed. And we should not forget that while nobody gets killed, there are still victims—workers who lose their jobs and companies that go bankrupt because their competitors are cheating.
One of the problems of our national trade policy debate is that people tend to overemphasize either fair or unfair trade and ignore the other. In fact, we have both, and the government has the task of telling one from the other. We should support their efforts to make the distinction and the actions they take when they find unfair trade.
William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.
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