From: hari@NeoSoft.com (Doug Andersen)
Newsgroups: tx.politics
Subject: Re: Protectionism and Japan
Date: 20 Nov 92 22:43:30 GMT
Distribution: usa,tx
Organization: NeoSoft Communications Services -- (713) 684-5900

In article <1992Nov19.145803.19489@mksol.dseg.ti.com>, mccall@mksol.dseg.ti.com (fred j mccall 575-3539) writes:
> Isn't most of our steel imported these days?  Now, the Japanese and
> Koreans have huge tariffs on foreign steel.  Do you have any evidence
> for this sort of impact?  Oh, just by the way, the biggest user of
> steel in this country is probably General Motors -- sure doesn't sound
> like someone without economic or political clout, does it?
 
Some steel is imported, I don't think it's even close to "most".  In fact,
the US has huge tariffs on steel itself.  I figured you'd bring up GM.  Of
course the only flaw in your argument is that while GM is hurt by steel
tariffs, they can hardly argue against steel tariffs when they themselves
have been seeking tariffs against Japanese cars for years.  
 
In fact, the steel industry doesn't just have tariffs, they have outright
quotas on the amount of foreign steel that can be imported.  Companies
which go to the US steelmakers and find that they can't deliver the steel
they need have to get permission from the Commerce Dept if the foreign
quotas have been used for the year!
 
> They 'can' -- how often is this done?  From the ones I've taken note
> of (primarily DRAMs, first from Japan and now from Korea), it would
> appear that a company has to be pretty blatant to draw any action.
 
It's done all the time Fred.  What American company wouldn't want to shut
out it's foreign competitors?  And whose side do you think the Commerce
Dept is going to take?  In dumping cases the Commerce Department rules in
favor of the US company in more than 98% of the cases!
 
> Why sell into the 'low price' markets at all, then?  Why not just
> produce enough for the high priced markets, since producing more costs
> more and the profit margin you can make is so much smaller in those
> other markets (or non-existent -- there are other reasons to want to
> sell abroad than for monetary profit; little details of political
> motivations (for countries where the government helps), hard currency,
> etc. 
 
I can tell you aren't a businessman.  Companies sell into a variety of
markets, some very lucrative, some much less so.  If your targeted profit
margin is 10%, it makes sense to sell in every market where you can make
reasonable revenues and at least a 10% margin.
 
> Yes, it CAN be, but it isn't.  We don't penalize other companies in
> other countries for using their 'publicly developed' technologies,
> either.  
 
The point is that countries do things different ways.  Some countries give
direct subsidiaries to business, others fund large amounts of government
research and give it away.  Some countries (especially poor countries)
don't fund a lot of reseach, but give money to companies.  Either way,
it's a transfer of money from the government to the private sector.
 
> Of course those are subsidies -- but they are subsidies FROM THE
> RECEIVING MARKET (for the jobs).  This isn't quite the same thing as
> what we're discussion.  You seem to be reaching further and further to
> try to justify your positions.
 
No, I'm just pointing out that all countries subsidies companies in some
way.  The US subsidies are often less direct than other countries, but
that doesn't mean they aren't just as valuable.
 
> I don't have to guess -- they'd better be using the OFFICIAL rates.
> That's what they are FOR, after all.  If the official rate and the
> 'real' rate aren't the same, then that's a problem for the government
> of the country with the artificial 'official' rate.
 
The Commerce Dept also plays games such as using the exchange rate at the
time the product was delivered, even if it was actually paid for months
ago.  When it benefits the US company's case of course.
 
> Rephrase away -- it doesn't make your comments any truer.  So, what
> you are really telling us is that U.S. companies should have to
> operate on a whole different set of 'rules' than everyone they are
> competing with, and if they can't compete with that disadvantage that
> they should simply be allowed to go under.  Sorry, Doug, but that
> position makes no sense at all.
 
No, I'm saying:
 
 1.  The world isn't fair
 2.  The US government can't make it "fairer" for US companies without
     someone paying for it
 3.  That "someone" who has to pay for it is the US consumer of said
     product
 4.  In general, the cost to consumers is much greater than the gain to
     U.S. companies
 5.  Open markets helps a country more than it hurts it
 6.  Foreign government subsidies are not the major reason many of these
     companies are in trouble.
 7.  The US government should use it's clout to push for open markets
     without subsidies and tariffs
     their own mistakes
 
-- 
Doug Andersen
hari@Sugar.NeoSoft.com