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Wednesday, November 12, 2003

Rove Judicata

Posted by DavidNYC

Yesterday I speculated that the Bush administration might try to throw up a new & different set of tariffs to replace those which were struck down by the WTO on Monday. I also wondered whether the WTO would actually swallow this gambit. In other words, would the WTO force the EU, Japan, etc. to relitigate the new tariffs? Or would it be wise to Rove's scheme and say "You may have paraphrased a bit, but we know it's the same thing. And it's still illegal." This distinction matters because it took the WTO over a year and a half to rule against the administration. If the countries opposing us on steel tariffs had to start back again from square one, Rove might successfully drag the new challenge out past election day.

Via Kevin Drum, it looks like the administration may indeed be trying this ploy. The Financial Times article that Kevin cites refers to "complex methodological changes" to American law which would somehow protect steel producers. How these would differ from ordinary tariffs is not quite clear, though I have to imagine these would also be justiciable at the WTO. Otherwise, if these types of changes were judgment-proof, wouldn't the administration have pursued them in the first place?

Yet even the best-case scenario for Bush - ie, the EU has to relitigate everything - might still not be that great. Anger appears to be running high in Europe (doubtless exacerbated by other factors), high enough perhaps that the Europeans simply wouldn't bother waiting for another WTO ruling before launching retaliatory trade measures. I have to imagine the French can't wait to cause trouble for Bush, and the beleaguered Tony Blair probably can't afford to bend over yet again. Unfortunately, the Europeans somehow have it in their heads that Texas is a swing state (guys, it's Florida citrus you're interested in, trust me), but if George Bush has to sweat a little bit even when he visits his home state, I'll be happy with that.

One final thought: Fester, in the comments, observes that Rove's mission to protect steel makers at seemingly any cost suggests that Bush is prepared to give up on Michigan. I'm strongly inclined to agree here. Let's see if Bush makes any more visits to MI.

P.S. I've read more about steel that I ever imagined I would - and by now, I've probably written more about it than anyone would care to read. So I'm going to let this topic rest for a bit, at least until December 5th, which is when the EU is expected to implement its relatiatory tariffs. (Unless something big comes up, of course.)

(NYT and Miami Herald links thanks to Dan Drezner.)

Posted at 06:53 PM in Economy | Technorati


This was in yesterdays Guardian:

Blair Ally in Poll threat to Bush

George Bush will be served notice today that the deep hostility towards him in Britain has reached the Blair inner circle, when the former minister Stephen Byers launches a bid to destabilise the president's re-election campaign next year.

On the eve of Mr Bush's state visit to Britain, Mr Byers, an arch-Blairite, will set out proposals to help Democrats in key swing states if the White House refuses to abandon punitive trade sanctions against the UK.

Acting with the tacit approval of Blair supporters, who were enraged when Mr Bush imposed tariffs on imports of British steel to shore up his vote, the former trade and industry secretary will call for sanctions to be imposed on four key marginal states which the president will need to win.

The states - and the exports to be targeted - are:

�� Florida and its citrus products. The state was the scene of the "hanging chad" saga in the 2000 presidential election, after Mr Bush and Al Gore virtually tied there;
�� Wisconsin and its apples and paper. Mr Gore won this state by a tiny margin;
�� Tennessee and its chemicals. Mr Bush scored a narrow victory in Mr Gore's home state;
�� Iowa and its agricultural equipment. This state will play a key role when the nominations battle starts in January.

Mr Byers also calls for tariffs to be imposed on exports of textiles, which would hit states across the American south.

In a letter to Pascal Lamy, Europe's top trade negotiator, Mr Byers calls for the EU to im pose the tariffs if Mr Bush fails to lift his sanctions by a December deadline imposed by the World Trade Organisation.

"It is clear that steel tariffs were introduced for short-term political advantage to deliver on a promise made by George Bush during the last presidential election campaign in order to gain votes in key swing states like West Virginia, Ohio, Pennsylvania and Michigan where the steel industry is a major employer.

"The EU should now indicate that if President Bush fails to comply with the WTO ruling, then it will impose tariffs targeted at the major sectors of employment in politically sensitive swing states."

Mr Byers' intervention will help Mr Blair, who plays host to Mr Bush as Britain and the US are struggling to assert their authority in Iraq, following incidents such as the Black Hawk helicopter attack at the weekend. The US military yesterday fired a satellite-guided missile for the first time since major combat was declared over on May 1, targeting a site where it said insurgents had set up a training camp.

Police and US secret service agents will mount a heavy security operation in London to protect the president, who is likely to face huge protests after he arrives at Heathrow tomorrow evening.

Mr Bush stepped up his charm offensive when, in an interview with Sir David Frost recorded several days ago, he said that he was delighted to be visiting a country where people were free to protest. But his emollient tone cut no ice with Clare Short, who resigned from the cabinet after the war. She told ITV the visit was "very embarrassing".

Mr Blair is standing by the decision to invite Mr Bush on the first state visit by a US president since 1918 because he is convinced history will judge them to have been right on Iraq.

But Mr Blair has never made any secret of his irritation with Mr Bush for imposing the trade tariffs in 2002.

Patricia Hewitt, the trade and industry secretary, underlined government anger over the tariffs when she told the BBC yesterday: "It is time for them to go because if they don't go by the first week in December we will be into a trade war with European retaliations against American imports."

There are hopes that the president, who will discuss the issue with Mr Blair, will signal a change of heart this week. At the weekend Mr Bush said: "I am listening, looking and we'll decide at an appropriate time."

His advisers may be shaken by Mr Byers' proposals. The tariffs would not technically be imposed on the four states, but would instead be directed against named exports which would adversely affect those sensitive states.

Florida is regarded as essential by both the main US parties. If the EU hit the citrus business there, with consequent job losses and economic fall-out, Mr Bush could pay a heavy electoral penalty.

All of the main Democrat contenders were in Iowa at the weekend. Any threat to Iowa's agricultural equipment industry would certainly be heavily exploited by the Democrats.

An Iowa Republican, Senator Charles Grassley, the chairman of the Senate finance committee, has already urged President Bush to end the tariffs on steel because of "changed economic circumstances".

Everett Ehrlich, an undersecretary of commerce under Bill Clinton, gave a taste of the battle ahead when he told the LA Times: "If the US sticks with the tariffs, the EU will surely retaliate now that it has the authority to do so."

Posted by: A.E at November 18, 2003 05:07 AM | Permalink | Edit Comment | Delete Comment