In The Devil’s Dictionary, Ambrose Bierce defined Congress as “a body of men who meet to repeal laws.”
My own view is that Congress spends too much time passing new laws that we don’t need. Every now and then, however, our federal lawmakers do get around to repealing an old one that’s worthless. In December, they repealed an old law that was not only worthless but positively harmful.
Their actions prove that reports on the death of free trade have been greatly exaggerated.
As laws go, the Byrd Amendment was not in fact terribly old. Its sponsor, West Virginia Senator Robert Byrd, slipped it into an appropriations bill just a few years ago. Although trade legislation usually leads to a lot of huffing and puffing in the halls of Congress, this one went through without a whisper of debate. That was probably how Byrd wanted it, because his legislation was an outrageous handout. It allowed certain American companies to receive special payments from the federal government--they essentially collected anti-dumping duties that normally would have gone into the U.S. Treasury.
This was a bad idea in concept, but in October we learned that it was also a bad idea in practice. The General Accountability Office determined that of the $1 billion in redirected Byrd duties, more than half was paid to just five companies. One manufacturer of ball bearings, plus two of its subsidiaries, received 38 percent of the total kitty. Candlemakers were also major beneficiaries. Butchers and bakers apparently didn’t do as well.
These Byrd-brained giveaways also violated U.S. treaty obligations, under the rules of the World Trade Organization. In addition, they exposed companies that had not sought protectionist handouts to more than $100 million in retaliatory tariffs. This result was so infuriating; I can definitely see why some people would resort to lighting aromatherapy candles.
Thankfully, the GAO convinced Congress that the Byrd Amendment should share the fate of birdcage liners--and late last year, both the House of Representatives and the Senate voted to trash it. (However, the phase-out will take two years to complete.)
This is a major defeat for Washington’s protectionists, as well as an important victory for free trade. The timing couldn’t be better, with so many pundits having spent the last several months proclaiming free trade’s impending doom.
There are other signs of life, too.
I won’t kid you and say that last month’s WTO talks in Hong Kong will go down in the history books as a smashing success. The achievements were at best modest. But the negotiations did not collapse, as some had feared. Trade diplomats settled on 2013 as the year for ending agricultural export subsidies. That’s further in the future than I would have liked, but at least it’s a deadline.
In the words of U.S. trade representative Rob Portman, the Hong Kong meetings kept “trade talks alive.” Perhaps even more significant, says Portman, “the importance of the rules-based multilateral trading system and the peaceful pursuit of expanded commerce were reaffirmed.”
With all the gloomy talk about free trade, this accomplishment is nothing to take for granted.
In fact, 2006 ought to see plenty of progress. The U.S.-Morocco Free Trade Agreement went into effect on January 1. The Central American Free Trade Agreement becomes official in a matter of weeks. The U.S.-Bahrain Free Trade Agreement won’t be far behind, with Congress having approved it last month.
Also in December, our trade officials completed talks with Peru. These will now either be submitted to Congress for approval or delayed slightly to see if Colombia and Ecuador want to sign on and make it a treaty with all three Andean nations. The United States currently exports about $1 billion in goods to this region. Exports will rise if tariffs fall.
Other deals are also in the works with Oman, Panama, Thailand, the South African Customs Union, and the United Arab Emirates. We may also see talks start with Egypt, Malaysia, South Korea, Switzerland, and Uruguay. It would not surprise me, in fact, if 2006 wound up being a busy year for free trade in D.C.
Maybe we’ll even be able to define Congress in a whole new way: “A body of citizens who meet to pass free trade agreements.”
Dean Kleckner is an Iowa farmer and past president of the American Farm Bureau. He chairs Truth About Trade and Technology (www.truthabouttrade.org) a national non-profit based in Des Moines, IA, formed and led by farmers in support of freer trade and advancements in biotechnology.
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In The Devil’s Dictionary, Ambrose Bierce defined Congress as “a body of men who meet to repeal laws.”
