Americans are less familiar with international trade management than other nations which depend on imports in their economy. America's primary import dependence is on oil importing. In the postwar era as at other times in its 20th century economy the USA 's trade component of its GDP was minor compared to other nations. That was the result of a continental resources blessed economy. Countries like Japan and the United Kingdom - very dependent on trade in their economies scrutinize trade assiduously in kind and quantity. America documented it; collected duties as required; and sided it. Other nations approaches through Trade Ministries now is the focus of President Bush's trade policies and follows the approach of his father and President Clinton.
Using Japan as an example - which uses MITI - the Ministry of Industry & Trade let's explain the approach.
By import license or tax quantification and customs declaration MITI quantifies and monitors articles imported into Japan's island economy. What and where something is being imported is the database of the Japanese national government.
MITI then takes several steps:
The import is a necessity and addressed that way ..
or is a competitor with domestic articles and addressed for proper trade analysis for advantage or import substitution by a domestic product.
Breathing room without purposive trade discrimination compliant with modern WTO rules is built in to their process.
First - the manufacturs and their trade associations of the product challenged (the word is preferred in use to 'threatened' ) by an import are notified (if they don't already know) to give them a reaction - a rallying time & chance. By WTO rules and Japanese law those manufacturers may concur in an 'import cartel' - to join in breathing time nationally -to stave off an import crunch or dependence by a that given reaction time and a joint effort to meet that import challenge with national competiton.
That means the business laws favor them with a joint national compeition option to save their business which combine would otherwise amount to a conspired trade restraint.
They may mount a jointnational advertising campaign; seek special re-tooling and financing for it; and jointly market.
On the export side - MITI does the same thing. Working with the Japanese business force and Japanese Embassy commercial attaches - they address business prospects abroad ..and then MITI permits Japanese businesses to unite in an 'export cartel', a combine to jointly promote their domestic business capacity abroad; through trade shows, joint sales etc. Thereby creating new markets for Japan's domestic capacity.
Americans now are doing the same - but it is just that due to our lesser past modern dependence on trade in our economy that we did not historically nor regularly do it. Imports and exports were, well foreign sideshows.
This is the modern approach to trade and the advantages of trarde for better business internationally and economically. It sustains good businesses from predator or peremptory price and supply assaults in the economy from abroad; and conveys the advantages of good quality and innovation to consumers. The 'fair trade' argument embraces it.
Like Japan's MITI the United States addresses import competition through the Office of the Trade Representative - an American Cabinet member with Ambassador status who in the name of the President negotiates trade agreements - including that reaction and transition time - as well as negotiating away barriers to American trade. The OTR may also recommend special protetcition to unique American industries which must be protected by tariff - whether specialty steels or machine tools or Harley-Davidson motorcycles. More trade professionalism coems from the ITA -the International Trade Administration in the US Department of Commerce. Protection when needed absolutely, or breathing room for positive American responsive competition.
Protecting the pricing factors when supplies are 'dumped' - sold under their cost of manufacture - is also a MITI like function done by the US government - actions registered with the WTO; and profesionally lawyered by business attorneys with their economists.
Americans affected by import competition in their jobs can seek and get the same break - of 'time'. Time to react and time to respond to competiton; and the same break to open markets abroad. Just as they now have in the ultimate - trade dislocation compensation for severance and re-training. The latter is the ultimate - the challenge is preventing its occurance by positive business forecasts for jobs obtention and retention.
The Germans, Japanese, and British always used to sigh in relief at the not appearing prospect of anAmerica going full speed into an export driven economy. "You'd swallow us !" they'd say.
it need not be that dramatic - but as importing and exporting increase their share of our economy - we must continue to address the issue professionally soberly and bi-partisanly.
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