Monday, June 16, 2008

Obama, Breaker of (Nontariff) Barriers

One man's environmental or health regulation is another's non-tariff barrier (i.e. a trade restriction in disguise). Barack Obama apparently sees alot of them, according to this useful NY Times examination:
“You can’t get beef into Japan and Korea, even though, obviously, we have the highest safety standards of anybody, but they don’t want to have that competition from U.S. producers,” Mr. Obama said last month in a speech to farmers in South Dakota. Last week, near Detroit, he asserted that “if South Korea is selling hundreds of thousands of cars to the United States and we can only sell less than 5,000 in South Korea, something is wrong.”
Yes, "highest safety standards of anybody" - I guess he hasn't been reading Paul Krugman (see the post immediately below). As for the cars, the article explains that while Korea's auto imports have dramatically risen, the US share has fallen:
One reason for the decline may be a longstanding engine displacement tax levied on automobiles by motor size, which appears to have benefited Japanese and European carmakers like Honda, BMW and Volvo. The United States considers the tax an unfair trade barrier and has sought to have it and other requirements “streamlined,” but defenders describe it as part of a Korean government strategy to reduce consumption of ever-more-costly imported gasoline and related carbon emissions.

“You can say that people in Korea don’t like American cars, but then you have to say why in nearby places people do seem to like them,” Mr. Goolsbee [Obama's economic advisor] said. He added, “The Koreans have designed a system that will prevent competition from a segment of the market that is different from what they produce, and that is a nontariff barrier.”

Pretty weak stuff - I don't think that argument would win a WTO case. This cheesy populism isn't exactly inspiring, but at least he hasn't (yet) suited up as a hockey goalie in a TV ad (as Bob Kerrey infamously did in 1992).

Update (6/18): At How the World Works, Andrew Leonard defends Obama against the charge of "protectionism."

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