[PEN-L:5196] Re: Trade Sanctions

[John Rosenthal <ROSLG@xxxxxxxxxxxxxxx>]

 Just a brief follow-up to the little spate of postings on the proposed
 U.S. trade sanctions.  When I said that matters were not "so simple" as
 was suggested by Jerry Levy's post, I certainly was not trying to be
 malicious.  If I want to be nasty, I'll really be nasty.  Relatively more
 simple explanations are often the theoretically superior ones.  But in
 this specific instance, as I tried to suggest, there so happen to be
 more factors at work than have generally been acknowledged.  The most
 "simple" account is the prima facie one contained, indeed, in the
 administration's own pronouncements: viz. that threat of sanctions (or
 perhaps the consequences of sanctions once applied) is intended precisely
 to compell the Japanese authorities to "free up" Japanese markets in auto
 replacement parts.  But, in the first place, I wouldn't take anything that
 these birds say at face value, no matter what it's about.  So, I'm inclined
 on a priori grounds alone to reject this simplest explanation.  Secondly,
 it's not at all clear in what sense the markets in question are not already
 "free".  The existence of customary networks of suppliers seems to me an
 unexceptional enough phenomenon, even under quite "unfettered" market
 conditions.  Nor does it seem especially scandalous or irrational that
 Japanese firms might prefer to purchase Japanese-made parts
 even if U.S. ones are cheaper: obviously a cost criterion is only *one*
 of the criterion determining consumer choice and in terms of *quality* I have
 no reason to believe that U.S. manufacturers in the auto sector should be
 feeling especially cocky these days.  Finally, to seek to establish and
 enforce trade *quotas* hardly seems to betoken any firm commitment to
 "free trade", in any usual sense of this last expression, and indeed would
 seem rather to suggest very much the opposite.  So, the Kantoresque
 lets-get-tough, "eye-for-an-eye" bluster just doesn't wash.

       A second explanation (and I gather this is part of what Jerry Levy was
 getting at) would be to say that the Clinton Administration just *wanted*
 to slap on tarrifs in order to protect U.S. industries (and the explicit
 "free trade" discourse is just intentionally mystifying bullshit).  Well,
 of course I agree (see above) that the discourse is intentionally
 mystifying bullshit.  However, as I suggested in my previous post, they
 could hardly have chosen a more innapropriate sector to "attack" if this was
 their aim -- which perhaps accounts for the lack of support from the private
 sector to which Doug has made allusion.

      So, the mystery remains.  A third explanation might be the "polyvalent"
 one I've proposed, taking into account US-relations with the EU and, above
 all, Germany.  Globalization etc. notwithstanding, geo-political
 positioning is not to be sneezed at.  The latter gets ignored only at
 a very high risk.
                                         John Rosenthal
                                         roslg@xxxxxxxxxxxxxxx