Wednesday, April 4, 2007

Victimized by Bad US Trade Policy

I can finally say that I was personally (negatively) effected by bad U.S. trade policy. Last week, the United States slapped tariffs on imports of glossy paper from China claiming that "the glossy paper is subsidized by the Chinese state". The US commerce department said they had no choice but "to act in a petition filed by an aggrieved U.S. paper company whose sales have been undercut by cheap Chinese imports." This is no good for me and the non-profit I work for as we print our electronic newsletters on glossy paper and send them to our funders. I was pretty shocked last week when color copies of our newsletter on glossy paper cost $15 for 16 pages! Apparently cheap Chinese paper has not yet found its way to the DC market; or it has but is about to get much much more expensive.

I find it funny/depressing that we use words like "cheap, unfair, predatory, ect." to describe China's subsidies of products imported to the U.S. By subsidizing paper, the Chinese are doing two things, 1) Making a calculated decision that it is worth taxing their people for the sake of the well being of their glossy paper industry, and 2) Indirectly subsidizing buyers of glossy paper in the United States, such as the company I work for. Do they think that the market for glossy paper is an excessively profitable enterprise? Whatever their reasoning for the subsidy is, it benefits my company, and on the whole it benefits the United States.

Instead of accusing the Chinese of attacking our suppliers of glossy paper, Secretary Paulson should:

a) Thank them for not subsidizing something else, like terrorism, their military, internet watchdog services, or the constuction of prisons to lock up their political dissidents. That would also make for a funny letter.

b) Laugh at them for providing subsidies to the glossy paper industry (am I missing something; is glossy paper a really valuable resource that the Chinese think will command high prices in the future? We're subsidizing research in the hard sciences and their subsidizing companies that cut down trees and process wood? I feel like I'm going crazy here)

c) At the very least commerce could calulate the benefits that the imports of glossy paper from China bring to the U.S., find that they outweigh the costs born by US suppliers of the glossy stuff, and (through the tax system) use a large chunk of the benefit to pay off the U.S. suppliers hurt by the imports.

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