Trade-bash­ing is bad for U.S. con­sumers

Waterloo Region Record - - ED­I­TO­RI­ALS & COM­MENT -

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Un­til now, the defin­ing fea­ture of Trump trade pol­icy has been a wor­ri­some yet vague reck­less­ness. The U.S. Com­merce Depart­ment’s rul­ing on Boe­ing’s dis­pute with Bom­bardier shows the harm that comes when the ad­min­is­tra­tion gets spe­cific. The rules that reg­u­late trade can’t work with­out re­straint and a com­mit­ment to a lib­eral eco­nomic or­der. Pres­i­dent Don­ald Trump’s ad­min­is­tra­tion lacks both.

Boe­ing’s com­plaint charges that the Cana­dian and Bri­tish gov­ern­ments are sub­si­diz­ing a new pas­sen­ger air­craft in con­tra­ven­tion of trade rules and that Bom­bardier is “dump­ing” it (sell­ing it be­low cost) in the U.S. mar­ket. This week’s pre­lim­i­nary find­ing pro­poses an ab­surdly high tar­iff — more than 200 per cent — as a rem­edy for the sub­sidy com­plaint.

If the fi­nal rul­ings, ex­pected next year, af­firm this judg­ment, the U.S. is in ef­fect ban­ning Bom­bardier’s plane from its mar­ket. Al­ready, the threat­ened ac­tion wounds the com­pany se­verely, put­ting many jobs at risk im­me­di­ately in Canada and the U.K, and even in the U.S. (where parts are made). Re­tal­i­a­tion is likely, threat­en­ing a mu­tu­ally de­struc­tive spi­ral of pro­tec­tion­ist ac­tion. The fu­ture of the North Amer­i­can Free Trade Agree­ment would be again cast into doubt.

Smart trade pol­icy puts con­sumers’ in­ter­ests above pro­duc­ers’ in­ter­ests. Com­pe­ti­tion is good for con­sumers — but pro­duc­ers don’t like it, and will try to limit it where they can. If gov­ern­ments for­get this, and put them­selves at the ser­vice of pro­duc­ers, com­pe­ti­tion, in­no­va­tion and liv­ing stan­dards are all in jeop­ardy.

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