Friday Quick Hits

The weekend's calling, so let's get right to it:

• Someone in the administration actually knows that imports exist and aren't evil.  I've given this administration a lot of flak for its blinkered, mercantilist approach to US trade policy (and deservedly so, I might add).  But I've recently discovered evidence that at least one person working in the administration seems to get it.  The US Department of Commerce released a new study this week touting the value of  - big shock - exports to the US economy.  But buried deep in the report are actually two explicit references to the important role that imports play in the future health and prosperity of the US economy (and US manufacturing in particular).  Crazy, I know!  First, there's this on page 4: "The most important contribution of exports (and imports) to the U.S. economy is its role in increasing the industrial efficiency and standard of living of the United States."  And if that weren't exciting enough, check this out on page 8: "The growth in the ratio for goods exports was boosted by the productivity gains posted within the manufacturing sector and by the expanding—and important—role played by imports in manufactured goods."  Nice, huh?  Now, for a normal, economically-literate US administration, these two small references would not be a very big deal.  But for this White House - one whose 2010 Trade Agenda included not a single word about import benefits in almost 20 pages of text - this is a very exciting discovery.  (Now I know how Jane Goodall felt!)  So to Mr. John Tschetter (the report's author), I'd like to deliver my sincerest kudos.  I really hope that this little bit of publicity doesn't get you fired.

• Benevolent USDA agrees to screw American consumers a smidge less.  Russ Roberts over at Cafe Hayek directs our attention to little-noticed news that the USDA will increase US quotas on imported sugar by about 300,000 tons (24%) this year.  Roberts is less-than-thrilled, and rightfully so: "What [the import-quota system] actually does is enrich a handful of families at the expense of the rest of us. It is a very ugly piece of public policy."  He goes on to point out that "the world price of sugar is about 17 cents a pound. Here in the US, we pay almost 31 cents, almost double."  I've noted previously how awful US sugar policy is, and I have little to add to Roberts' astute analysis, except for this one final thought: I love how USDA is trying to spin a small increase in sugar quotas as a "good thing" for US consumers.  Yes, it's better than the current quota amount, but saying it's "good" is like saying that punching me in the groin only 3 times is "good," because you had originally planned to punch me 5 times.  Gee, thanks, USDA.

• Zombie protectionism continues to roam the earth.  Europe announced Thursday that it would resume retaliatory tariffs against the United States' use of the "Byrd Amendment."  The EU tariffs on 19 American exports will be set at 15% and will total about $96 million.  Ouch.  The EU first imposed the duties in April 2005 pursuant to the WTO's ruling that the United States’ distribution of antidumping and countervailing duties to domestic firms (instead of the US Treasury) under the Byrd Amendment (aka the Continued Dumping and Subsidy Offset Act or "CDSOA") violated WTO rules.  As I've noted previously, even though the WTO first ruled against the Byrd Amendment in 2001, and even though the US eliminated the program years ago, the duties are still being (illegally) disbursed;  Thus, countries like the EU and Japan continue to retaliate against American exporters.  The new EU sanctions will apply as of May 1, 2010.  There's been no word yet from the White House as to how exactly this boondoggle helps the President advance his new National Export Initiative (because it doesn't).

• Zeroing violates WTO rules and US law.  Speaking of US non-compliance with global trade rules, Simon Lester over at the International Economic Law and Policy blog reports on a NAFTA panel ruling that the controversial US practice of zeroing, which the WTO repeatedly found inconsistent with global trade rules, also violates US law.  I can't wait to hear how protectionist congressmen and the AFL-CIO spin this one.  Oh, who am I kidding, I know exactly how they'll spin it - by declaring the entire NAFTA panel process illegitimate, of course! 

Have a good weekend, everybody.