10/25/01
The Asian Wall Street Journal

By Greg Rushford

WASHINGTON, D.C. -- The Sept. 11 attacks showed the world how terrible adversity can bring out the best in Americans. But also the worst, as seen in powerful industry lobbies here that have sought to impose protectionist trade barriers on America's allies in the war against terrorism.

No lobby has been kicking the coalition partners in the teeth more than steel, even as the Bush administration was asking them to make major political and diplomatic sacrifices to support military action against Osama bin Laden.

Steel began carping about protection in the name of national security as the rubble of the World Trade Center still lay smoldering. U.S. Sen. Jay Rockefeller announced on Sept. 17 that destruction of the twin towers was proof that quotas should be slapped on "unfairly" traded foreign steel. "Without steel we cannot guarantee our national security," said Sen. Rockefeller, who hails from the big coal and steel state of West Virginia.

Following suit, the American Iron & Steel Institute implied American-made steel had allowed the WTC to withstand the initial impact of the commercial aircraft strikes long enough to allow thousands the time to escape. Truth is, 40% of the steel used to build the towers was made in Japan.

Then on Sept. 28, Bethlehem Steel, U.S. Steel and six other American steel mills filed a petition with the U.S. Department of Commerce against 20 countries. Those accused of "dumping" steel in U.S. markets included NATO allies Belgium, France, Germany and Turkey, and other nations helping in the war against terror, Russia, Australia, China, India and Japan. While President George W. Bush was asking Egypt to help fight Islamic extremism, steel lobbyists were demanding Mr. Bush impose quotas on Egyptian rebar.

Americans didn't much care that many of the flags they've waved or hung from their porches were made in China. But the U.S. textile lobby wants them to worry that American soldiers may face bin Laden and the Taliban naked. Which is why the American Textile Manufacturers Institute has pushed "Buy American" laws restricting the ability of foreign companies to bid for U.S. military uniform contracts.

"The American textile industry is a key supplier to the U.S. armed forces, providing 13,000 different items for their use," ATMI told members. "Contact Congress to let them know that, in spite of the industry's current economic hardships, we stand ready to meet the needs of our military in the war on terrorism." ATMI has tried to capitalize on the war by trying to persuade Congress to slip the so-called Textile Industry Revitalization Program into the $100 billion economic stimulus package.

Until recently, ATMI had lobbied to deny Pakistan -- America's most fragile ally -- trading privileges routinely offered to poor countries. Pakistan's sin was to sell Americans nearly $2 billion worth of cotton yarn, towels and sheets annually. The textile lobbyists had pressed the Clinton administration to cap Pakistani cotton imports, but such efforts were rebuffed by the World Trade Organization, which branded them retaliatory and therefore illegal under its rules.

After Sept. 11, ATMI tried to take the higher road. In an Oct. 5 letter to Donald Evans, the U.S. secretary of commerce, the group generously proposed giving Pakistan duty-free entry for "hand-knotted and hand-hooked floor coverings," which ordinary people call rugs. This could be worth $100 million in sales to Pakistan, ATMI said, promising to refrain from moving against any "surge" in Pakistani imports for at least six months.

Think of rugs hand-woven by Afghans living in Pakistan's many refugee camps along the Afghan-Pakistan border. Why AMTI expects refugees to somehow sell more rugs to the U.S. during a war that is likely to last longer than six months is anybody's guess.

But the biggest hogs at the public trough have been America's farm lobby. Despite warnings from the White House about unnecessary federal spending in a weakened economy, the House of Representatives recently passed the "Farm Security Act," providing $49 billion in subsidies per year over 10 years to cotton, wheat, soybean and peanut growers.

"It is imperative, especially during this time of crisis, that we protect our American producers and keep our country's agricultural industry strong," said Rep. Larry Combest, who worked on the farm bill with Democratic Rep. Charles Stenholm. Mr. Combest, who chairs the agriculture committee, posted an article from Progressive Farmer magazine on his Web site that links the war on terrorism to providing "security" to American farmers.

But real security must be that which procures American prosperity, which can only be achieved if the global trading system has strong American leadership. Only free trade can create the global conditions by which Americans and everyone else can prosper. Is it a coincidence that the fanatics who attacked New York and Washington are ensconced in Afghanistan, one of the world's poorest countries?

The U.S. Congress must now decide whether to grant President Bush the fast-track trade powers -- formally known as trade promotion authority -- he needs to cut regional or global trade deals. To make the right decision they will have to stop listening to the protectionists and union leaders who still don't see the connection between fast-track, free trade and the national-security imperative to wage economic war against terrorism.

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