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Show Thursday. March 25, 1999 The Daily Utah Chronicle - 7 Don't Shield American Steel From Competition . Sachs Stephen Harvard Crimson (Harvard U.) . As soon as the Asian crisis began, many economists expected that it would boost the U.S. trade deficit. Countries hit by the crunch are less able to buy U.S. goods and more to sell their own goods; as the U.S. economy was the strongest in the world, it appeared to be the importer of last resort, buying goods when no other economy could afford them. The biggest danger from the crisis, it was predicted, was that the United States might refuse to play this role, erecting barriers against world trade, knocking out the supports from the global economy and repeating the mistakes of the 1930s. this scenario Unfortunately, out be seems to already. Last playing Commerce the DepartThursday, ment announced the trade deficit had hit its highest monthly level in history. Just the day before, the House had voted to approve a strict quota on steel imports, capping 7 levels. Although them at the bill is expected to fail in the Senate, the 289 to 141 House vote for hard-press- ed its unions. In his State of the Union address, Clinton warned of great harm to the steel industry from abroad and threatened tariffs against Japan. But how much harm has really occurred? The United States imported almost a third of its steel in 1998, up from about 25 percent the year before a change, but hardly one which spells the death of the domestic steel industry. Even the estimate of 10,000 jobs lost in the steel industry pales in compari- - workers employed at steel con- sumers. Whenever we protect a single handindustry, we give a d out to a interest. special Consumers have to pay the burden for the producer's gain. To evade these issues, some in Congress have chosen to attach a mystical significance to the steel industry, exalting it above all others. However, the historical prominence of an industry should have little high-lev- el well-place- emotional attachment to steel, it is clear that we do not depend on the industry nearly as much as those countries that are accused of unfairly exporting it. In Russia, for instance, steel represents about seven percent of total economic outputand given the shape of the Russian economy, every percentage point counts. On Feb. 22, the Commerce Department badgered Russia into "voluntarily" cutting its steel imports by 70 percent, leading even Whenever we protect a single handout industry, we give a high-levd to a special interest. Consumers have to pay the burden for the producer's gain. el well-place- pre-199- blatantly protectionist measure shows how sentiment has changed in the few years since NAFTA was a approved and how easy it is for matters to take a drastic turn for the worse. When the global slowdown hit Russia, Korea and Japan, these countries responded in part by boosting their exports of steel to the United States. The Clinton administration initially played along with the demands of the steel industry and son to an economy which regularly creates 250,000 jobs in a month. As the House Ways and Means Committee pointed out, the threats to steel producers from steel imports are outweighed by the benefits to industrial steel consumers, such as General Motors. Such companies employ about 40 times as many workers as the entire steel industry. Each dollar that workers in the industry gain from protected prices will represent one dollar taken from the pockets of TnHIB MIDDLE EAST continued from page 6 low-pric- ed (D-Ohi- o) EMILY OTMHJ Even Clinton's own report to Congress in January notes that a recovery in Asia and other markets "would be the single most significant antidote" to the industry's troubles. If we start erecting barriers, the recovery will be that much more difficult Yet the vote in the House was not only about steel. Minority Leader Richard A. Gephardt made no secret of his intent to make steel only the first step in a general protectionist program. He called for a plan "to combat the unfair imports" that have resulted from the economic crisis, saying "the U.S. should not be forced to unilaterally take in a massive global import surge." Such a move would be one of the most dangerous actions we could undertake. Removing the booming U.S. economy from the world scene would make recovery far more difficult, as well as probably end the boom. Also on Thursday, the Labor Department noted that trade had kept inflation low even as unemlevels. ployment stayed at record-loFree trade may not be a magic cure-alPromoting labor and environmental standards abroad can be a worthwhile endeavor. However, sacrificing world growth to promote the interests of the steel industry is not. If the United States is truly concerned about its industries and workers, the solution is not to protect them from the marketplace in which they have to compete. w l. re OHIimlllOlI, (581-618- 1) Middle East Week March 21 - 26 '99 Israeli Jilm : CBB09Bi- - Under the Domim Tree 2:00 pm Olpin Union Theatre CRAZY Commerce Secretary William M. Daley to recognize that "There is a legitimate concern about taking Russia to its knees." Blocking imports from a country already on the brink of financial and political disaster simply can't be a good idea. The result is a classic example of the right hand not knowing what the left hand is doing. The IMF is currently loaning Russia billions of taxpayer dollars, but how much of that money could be saved if we simply allowed U.S. consumers short-sightedne- The Middle East Studies Student Advisory Committee, Middle East Activities Committee, invite you to take part in... and Middle East Center of the University of Utah East by participating in our activities. We hope to see you there. Philippos K. Savvides and Matt Malczycki of the Middle East Week bearing on current policy. Rep. Dennis Kucinivich compared the quota to administration efforts to open Europe's markets to bananas, but his arguments at times verged on the absurd: "Bananas did not build America. Steel did...We cannot build a tank with a banana, we cannot build a plane with a banana, we cannot build ships with a banana. We did not build cars with bananas...We built America with steel." However, no matter how great our to buy Russian steel? Although the bill's supporters give lip service to the idea that the American economy is dependent upon events abroad, the House vote shows a frightening In Hebrew with English Subtitles continued from page 6 M.E.C. DISCUSSION GROUP: such as through writing. It keeps me sane. You, however may choose a different path screaming at the top of your lungs at odd hours of the night or running across campus covered in lime Jell-for example. Let loose a little before finals; it can save your 4:15 pm Gender, Honor and Modernity 208 Orson Spencer Hall in Middle Eastern Entertainment: Asmahan and Farid sh Sherifa Zuhur, American University m Cairo sanity and keep your brains where "V they belong. Jeff Herman Senior, Biology al-Atra- PANEL DISCUSSION: Iran twenty years after the revolution Noon 255 Orson Spencer Hall Soheila Amirsoleimani, Nayereh Fallahi, Michel Mazzaoui Middle Eastern Festival! 6:30-10:0- 'J any Mum!" roe mm .1 1.7 PiKUiV pm 0 Live Middle Eastern Music Panorama East DeSSertS 3rd floor, Poet ry J f rKMllLitllL OlpinUnion by Graeleaf Baklaxa, Turkish coffee, other & su? e ts Kalhcnne St. & bei'erages Classical, Modern & original works, presented in Arabic, Hebrew, Persian, Turkish, and Greek 6 in translation Qhiiddle East Week is made possible by the financial support John |