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1975. capluring 20 percenl of lhe
U.S . market. Ultramodern s lee l
plants in Japan, Korea, Weste rn Eu–
rope and elsewhere were under–
cutting American prices badly.
Executives here, noting many in–
stances of excess plant capacily
overseas, claimed lhe imporled steel
was being "dumped" at below cost.
Whether completely true or nol,
over 60,000 American steelworkers
lost their jobs because of imports in
1977 alone. lndustry specialists as–
serted that a nother 96,000 jobs
would go if imports were permitted
to capture another 10 percenl of the
market. Hence the new " lrigger–
price" formula.
But the American steel slowdown
is far from unigue. European o ffi –
cials have been guick to echo Presi–
den! Ca rte r's asse rtion that the
steel crisis is really a worldwide
one.
1n the past two decades one un–
derdeveloped count ry after another
has created its own prestige steel in–
dustry, walling off traditional export
markels plus adding more capacily
to an increasingly glutted ma rket.
As a rcsult. European milis are run–
ning al grealer excess capaci1y than
American ones, and many similar
problems are being encountercd.
Steel industry jobs in West Ger–
many- lhe economic "locomotive"
of the Common Market-are now at
lhe lowesl leve! since 1961. During
1977, 10.000 steelworkers were la id
off in Germany and an addi–
tional 30,000 were put on short-time
work.
Unlikc the American steel mar–
ket, which had a boom time in early
1976, lhe European steel crisis has
dragged on for two years.
Quotas
by Any
Other Name
The compromise s1ee l proposal
("trigger-price" formula) follows a
pattern set earlier this year when the
United States engineered so-called
"orde rly marketing agreements"- a
euphemism for what are essentially
guotas- to protect the domestic shoe
and color- tele v isio n indus–
tries.
So. while President Carter re–
mains officially committed to fur–
thering free trade and a new round
of tariff cuts in the next General
Agreement on Tariffs and Trade
The
PLAIN TRUTH Apri l 1978
(GATT) talks , pressures to go the
opposite direction are building up
steam in Congress. According to one
Co ng r essman : "Cons tituencies
aren't built on free trade- they ' re
built on protectionism." The bene–
fits of free trade are diffuse and dif-
UPI
ficult to tally. In the emotion of the
moment, the pleas of economists
that imported goods help hold down
prices of domestically produced
goods and thus help dampen in–
flation usually go unnoticed. The
closing of a shoe factory, on lhe
o ther hand, can send bolh union
leaders and industry representatives
rushing off to Washington for an
emergency meeting with the area
Congressman.
The $12,000 Mustang
Not helping matters much a re well–
known facts and figures detailing re–
strictive trade practices in olher
countries which act as barriers to
free trade. Protectionism is so built
into Japan's foreign-trade approach,
for example, lha l experts believe il
will take years 10 overhaul il, even
given lhe concessions made by lhe
Japanese in January.
Japanese agriculture is heavily
protec ted against outside com–
petition. Japanese farmers, more–
over, have such an influential role in
national politics that they have been
successful in pressuring their gov–
ernment to e rect an unbelievable ar–
ray of quotas. quarantines and
artificially high import price bar–
ri ers. Beef import quota·s a re con–
trolled by a cartellhal sets prices up
to ten times the world price. Me–
dium-grade hamburger retails in
Tokyo for aboul $7 a pound.
Japanese officials and business–
meo deny thal they restrict imports.
They argue that U.S. producers sim–
ply don't try hard enough to under–
stand and penetrate the Japanese
market. But Americans who have
tried lo buck the Japanese system
confront a seemingly endless entan–
glemenl of inlerests among industry.
banks and govcrnment. One nolori–
ous example of how costs are added
on lo U.S. imports: By the time a
Mustang 11 automobile travels its
prescribed route through red tape
and counlless middlemen, it winds
up with a $12.000 price tag!
Free Trade
vs.
Fair Trade
Little wonder the enti re philosophy
of free tradc has come under attack.
At the recenl AFL-crO meeting in
Los Angeles, President George
Meany referred to the "very real
possibility" tha t the AFL-CIO will
swing its lobbying machinery for
1978 bchind new restrictive legisla–
tion. Added the 83-year-old union
boss: "A government trade policy
predicated on old ideas of free trade
is worse than a joke.
It
is a pre–
scription for disaster. The answer is
fair trade; do unto others as they do
to us, barrier for barrier. closed door
for closed door."
Mr. Meany apparently is not at
all worried about a trade war. "We
would do quite well for one simple
fact: We have the market," he says.
"We have the greatest market
in
the
world right in this count ry."
Mr. Meany's casua l dismissal of a
trade war. or at least the effect it
would have on the United States. is
9