Wednesday, 12 November 2003

Trade and jobs

Daniel Drezner is displeased at the news that the administration may try to evade the WTO ruling against the steel tariffs. The adminstration plans to maintain these protectionist barriers despite evidence that the steel tariffs cost many more American jobs—in many industries that use steel—than they saved.

The open political question is whether the tariffs are causing enough damage to the overall economy, including the economic recovery, that their marginal benefit in states like West Virginia is offset. The trouble here is that the marginal benefit from the tariffs is easy to quantify, because it is concentrated, while the damage is diffuse—thousands of jobs spread across perhaps two dozen states. And that damage could get far worse if it leads to a trade war with the European Union, who—in this case, at least—are clearly in the right.

Like Dan, I hope the administration will come to its senses. But I can’t be optimistic, especially since the dynamics of the Democratic campaign preclude almost any criticism of Bush from that quarter for not being enough of a free trader.