MAPI Calling for Free Trade Agreement Fast Track to Help US Exporters

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Anti-Dumping, Global Trade

Who would be a politician? On the one hand one part of the US manufacturing base is calling for greater tariffs and protectionism against imported products, (note our recent article on the 35% import duty the US administration slapped on tires from China) while on the other hand, a different sector of the manufacturing base represented here by the Manufacturers Alliance for Productivity and Innovation (MAPI) is calling for the rapid approval of three Free Trade Agreements before Congress. Currently under review are three FTA’s for South Korea, Colombia and Panama according to In fact the MAPI is going further and urging administrators to fast track a similar FTA with India which is at an earlier stage.

Central to the MAPI’s concerns are FTA’s the European Union is signing with South Korea and Singapore and which they fear would disadvantage US manufacturers trying to sell into those markets. European exports would be duty free into those growing Asian markets but struggling US exports would still face import duties. Of course what the MAPI call to arms does not address is the other side of a FTA, namely exports from those countries which then become duty free into the US – hence the challenge for US administrators – which is in the country’s best interest? As a net importer of manufactured goods, the US is logically better off with a level of modest import tariffs to help protect domestic jobs and industry but that presumes the country does not have aspirations to grow its exports. An aggressive growth in exports is probably one of few mitigating steps the US can take to its massive indebtedness with the rest of the world. Others worry that the US has already lost far too much manufacturing to overseas countries, particularly China, and cannot afford to risk losing anymore. In reality, the presence or absence of a modest 5-10% import tariff is not going to level the playing field. When the US is trying to compete with a country like China that has a currency possibly 20-30% out of alignment, a minor import tariff is not going to offer any protection whatsoever.

Politicians need the Wisdom of Solomon to decide on that one, but that won’t put MetalMiner off adding our thoughts to the debate going forward.

–Stuart Burns

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