President George W. Bush and his chief of staff, Josh Bolten, are determined to do everything in their power to wrap up the World Trade Organization’s Doha Round of trade liberalizing negotiations before the president leaves office in January 2009, only ten months away. The possible good news, at least for incorrigible optimists, is that there are signs emanating from the WTO’s headquarters in Geneva that the long-troubled negotiations, now in their seventh year, may be rousing from their familiar torpor. So now the president is hoping to set the Doha agenda for the next likely occupant of the Oval Office, who would recognize soon enough that failing to push the deal through Congress would risk serious damage to America’s international economic prestige.

Toward this end, Bush and Bolten brought a new negotiating weapon into the National Security Council last May, in the name of Dan Price. As the deputy national security advisor for international economic affairs, Price’s NSC portfolio ranges from dealing with global warming to energy security issues. But increasingly, Price is playing an important behind-the-scenes White House role as a would-be closer in the Doha negotiations. When he speaks to WTO Director-General Pascal Lamy, EU Trade Commissioner Peter Mandelson, and other top-level representatives of key WTO members from New Delhi to Sao Paulo, the foreigners are made to understand clearly that Price is speaking for the president of the United States. The news about Price’s powerful role, which has received scant publicity, comes from a series of off-the-record interviews with diplomats from Europe and Asia who have spoken with Price, and a handful of Washington lobbyists who have been made privy to the White House’s inside game on Doha. It is confirmed by well-connected administration officials who shrugged and said while they usually don’t talk about their inside strategy, they saw no reason to deny a (rare) story that portrays the Bush White House in a positive light.

Naturally — Washington being gossipy Washington, where perceptions shape all policy discussions — the first question that arises is whether by placing such confidence in Price, the White House is undercutting the president’s top trade negotiator, U.S. Trade Representative Sue Schwab. After all, that’s what sometimes happened during the predecessor Clinton administration, when President Clinton’s White House chief of staff John Podesta and economic adviser Gene Sperling at times famously undercut the negotiating authority of U.S. Trade Representative Charlene Barshefsky.

The short answer to the present question about whether Schwab is being sidelined is…

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Last Sunday, two days before Ohio Democrats voted in the Buckeye state’s March 4 presidential primary, 60 Minutes broadcast a very compelling story from Chillicothe, a town of some 22,000 about an hour’s drive south of Columbus. Presenter Steve Kroft interviewed a sad-eyed worker who cried softly as he related his despair that he will lose his job in a paper mill this November. Mr. Kroft also interviewed an equally sad-eyed executive from another local paper company, Glatfelter Co., who said he didn’t know how he could continue to compete when he pays American workers some $20-per-hour and his Chinese competitors pay their workers a small fraction of that. We need tariffs to level the playing field, the businessman told Mr. Kroft, who then earnestly asked Democrats Hillary Clinton and Barack Obama if they agreed that protectionist tariffs were the answer to the woes of American manufacturing. It was powerful television.

Not to spoil a great story, or to deprive anyone of an opportunity for a good cry. But perhaps more than a few viewers might have refrained from reaching for their hankies if they had known a few basic economic facts that 60 Minutes didn’t tell them. Consider first the executive from Glatfelter’s Chillicothe paper plant with the fearful look in his eyes as he talked about China. Glatfelter is headquartered in York, Pa., and its Chillicothe operation is one of several in Ohio and Pennsylvania. But there’s more. Glatfelter employs more than 3,800 people worldwide, including Germany, the United Kingdom, and the Philippines — plus an office in…China. Last year, Glatfelter reported record profits. And it turns out that the soon-to-be unemployed Ohio paper worker’s job is indeed moving — but to Wisconsin, not China.

The awkward thing about facts is that they can get in the way of a great story.

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Considering the troubled state of U.S. housing markets, why would the federal government try to drive up the price of any essential component of every American home? Like nails. There is nothing fancy about Certain Steel Nails from China and the United Arab Emirates, an anti-dumping case that is as common as they come. Yet, looking into just this one case is important, as it illustrates how one of the most important, if perhaps the least understood, tools of U.S. trade policy work — or don’t work — at ground level.

Dozens upon dozens of imported products that are in everyone’s daily lives — popular seafood delicacies like shrimp and salmon, chemicals and fibers that go into everything from toothpaste and clothes to fertilizers; garlic, honey, mushrooms, apple-juice concentrate, tomatoes, pencils, notebooks, computers, bicycles, beds, plastic grocery bags at the checkout counter, gift boxes and wrapping paper, garbage cans and sewer pipes, the rebar foundations and steel beams that are part of every skyscraper in America, home appliances including refrigerators and televisions, automobiles and everything else that has some steel in it, and even the softwood lumber that goes into every home — are, or have been in the recent past, subject to special taxes upon entry at U.S. ports. The duties are slapped on when the federal government determines that the foreign wares have been offered to American consumers at “dumped” prices that are “unfairly” low. On Capitol Hill, the two emotionally charged pejoratives — “dumped” and “unfair” — are the beginning and end of the political debate. Many lawmakers, from West Virginia’s liberal Democratic Sen. Jay Rockefeller to Utah conservative Republican Sen. Orrin Hatch, routinely condemn “illegal dumping.” And in the White House, President George W. Bush regularly tells audiences that he is for “free trade,” as long as it “is fair.” Bush’s predecessors from Bill Clinton to Ronald Reagan all said the same. The bipartisan common denominator is that the politicians all know that they can get away with saying such things without fear of being challenged.

Not that most residents of Capitol Hill really understand the details; most don’t pretend to — and find it politically convenient not to ask questions that might question their own rhetoric. Apart from the handful of bureaucrats in Washington, D.C. who administer the trade laws, and also the members of the international trade bar who litigate the cases, few people really understand how the anti-dumping laws actually work, and whether, as advertised, they save American jobs from competition that is really unfair. The exception would include mainstream economists in virtually every university in the country who regard the basic theory that drives the anti-dumping laws with disdain. But not many academics follow the details of how dumping cases play out. No major American newspaper has an investigative reporter — not a single one — assigned to dig into the arcane world of anti-dumping. The wire services report the headlines, but rarely the full context. So it’s no wonder that very few Americans know very much about these laws that are embedded in their lives.

When Americans who live outside the Washington beltway hear politicians rail against “illegal dumping,” they would have no way of knowing that there is no such thing. Nor would the average American know that the anti-dumping tariffs tend to cost more American jobs that are intended to be protected. So this article about Nails is for them, the folks who are getting hammered all the time by the anti-dumping laws and don’t even know it.

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