Tim Worstall

Trade Dumping

He’s done it again. Wondrous:

Mr Mandelson has now tabled a new proposal that would apply
definitive anti-dumping duties of 16 per cent and 10 per cent
respectively to Chinese and Vietnamese shoe imports from early October.

The new duties, which would remain in place for five years,
would also be applied to children’s shoes — defined as sizes below 38.
These previously had been exempt. The duties would be lower than the
provisional import taxes of 16.8 per cent on Vietnamese shoes and 19.4
per cent on Chinese footwear that were agreed in March.

The levies come after a European Commission investigation
found widespread violation of international trade rules that enabled
Asian shoes to be sold at below cost price. Illegal practices included
cheap finance and tax holidays.

Temporary anti-dumping tariffs of up to 20 per cent on leather
footwear, excluding children’s shoes, have been introduced since April
by the European Commission. Proposals will extend the punitive duties
for five years from October.

We knew this was coming but it is still stupid. Insane in fact. Here’s the argument. The Chinese and Vietnamese taxpayers are subsidizing the production of shoes. These then get sold in Europe at a price lower than the "true" cost of production. So we must stop this.

Anyone see the flaw here? This is a subsidy from the Chinese and Vietnamese taxpayers to the consumers of Europe. The only rational response for those who have the interests of the consumers of Europe at heart is "Thank You".

That this is not the answer given shows that the EU (which unfortunately handles all of our trade negotiations) does not have the interests of consumers at heart. So fuck’em.

And he’s doing it again:

The Commission plans to place anti-dumping tariffs of 15.2 per cent on
plastic bags from China and 14.3 per cent on bags from Thailand

Once again the Commission acts to make us all, 450 million of us, just that little bit poorer.

Mandelson really is a complete tit.

In

8 responses

  1. Bob B Avatar
    Bob B

    “Mandelson really is a complete tit.”
    Was this ever seriously disputed by anyone apart from Tony Blair and, presumably, PM’s parents?
    A few threads ago, I speculated about eccentricity running in families but possibly other traits do too.
    PM is Herbert Morrison’s grandson. In his autobiography, Hugh Dalton records one of many chummy conversations he had with Ernest Bevin, the foreign secretary in Attlee’s government and one of the founding architects of the NATO alliance. Dalton remarked that Herbert Morrison – who was forever engaging in plots to depose Attlee and become prime minister in his place – “was is own worst enemy.” “Not while I’m alive, he ain’t,” Bevin memorably responded.
    The genuine political friendship between Bevin and Dalton is one of the more unusual stories of politics in the last 60 years. Bevin had had little formal education yet became one of the most respected – and influential – foreign secretaries in British history since WW2. For comparison, Dalton was educated at Eton College, King’s College, Cambridge, the London School of Economics and the Middle Temple. During World War I, he served as a soldier on the French and Italian Fronts. He then returned to the LSE and the University of London as a lecturer and produced what was until the late 1950s one of the best known student texts on Public Finance. He was the essence of an establishment figure and for all that got on extremely well with Bevin, whom he admired.
    On Morrison’s behalf, it should be said that he was the principal architect in Attlee’s government for the legislation which created the public corportations to assume the ownership and management of the nationalised industries until these were finally privatised by Mrs T’s governments. One fundamental ingredient was that the appointed boards of directors of the public corporations were charged to manage the assets in “the public interest”. Sadly, what that was was never defined and had to be divined either by intuition or ministerial directives. Judging by the continuing fractious arguments over running the NHS, precisly what constitutes the public interest is evidently still open to dispute.

    Reply
  2. johnny bonk Avatar
    johnny bonk

    Tim – do you think you could have got a better deal? As you so rightly point out, we should simply take the cheap stuff on offer, however that was not an option.
    I dont know whether Mandy did a good job or not, but his hands were surely tied (by the usual suspects). He accepts free trade and fights for it in the EU.
    If you really want to take the rise out of him, how about ragging him for his unconditional conversion to Thatcherite freetradery after having so wholeheartedly opposed it for so long. Or his haircut (wig?), or that other thing he is well known for … yunno what im gettin at.
    Mandy is fair game, but let us not tease him for trying to do what you or I would try to do.
    Hail the Project!

    Reply
  3. Dr Maybe Avatar
    Dr Maybe

    Is this because the Italians have some deranged idea that they can’t easily shut down their shoe manufacturing industry for a couple of years and then restart it when the East stops subsidising?

    Reply
  4. Tristan Avatar
    Tristan

    One day these politicians might realise that trade is not a war…
    Miracles may happen and they may realise that the interests of one section of producers are not the best for people in general…

    Reply
  5. Bob B Avatar
    Bob B

    “his unconditional conversion to Thatcherite freetradery”
    ROFL! Try:
    “The repeal of Britain’s Corn Laws in 1846 – one of the most important economic policy decisions of the nineteenth century – has long intrigued and puzzled political scientists, historians and economists. Why would a Conservative prime minister act against his own party’s interests? The Conservatives entered government in 1841 with a strong commitment to protecting agriculture; five years later, the Conservative prime minister Sir Robert Peel presided over repeal of the protectionist Corn Laws, violating party principles and undercutting the economic interests of the land-owning aristocracy. Only a third of Conservative members of Parliament supported the repeal legislation and within a month of repeal, Peel’s government legislation fell. The Conservatives remained out of power for decades. In this definitive book, Cheryl Schonhardt-Bailey examines the interacting forces that brought about the abrupt beginning of Britain’s free-trade empire.”
    http://www.lse.ac.uk/collections/pressAndInformationOffice/publications/books/2006/From_theCornLawsToFreeTrade.htm
    However, the actuality was more complex:
    “Britain preached the gospel of free trade and France was cast in the role of the sinner, but there was little truth in this stereotype. France did have more protected products than England did but the average level of French tariffs (measured as total value of duties divided by total value of imports, cf. Figure 1) was actually lower than in Britain for three-quarters of the nineteenth century.2 In other words, tariffs had a smaller impact on French trade than British duties had on Britain’s trade. The French, while eschewing free trade, and openly rejecting the Anglo doctrine of open markets, actually succeeded in making their trade more liberal and more open than that of the more vocal British.”
    http://www.econlib.org/library/Columns/y2003/Nyefreetrade.html
    http://www.theihs.org/pdf/materials/518.pdf
    Conservative Party divisons over free trade long preceded Mrs Thatcher:
    “So divisive was the matter that the Tory Prime Minister Balfour (1902-6) was forced to sack half his Cabinet; and it was the Free Trade debate that prompted Winston Churchill to leave the Conservative Party and join the Liberals.”
    http://www.bbc.co.uk/radio4/history/empire/episodes/episode_78.shtml

    Reply
  6. Umbongo Avatar
    Umbongo

    When Morrison ran the pre-war LCC he was responsible for the policy of “building the Tories out of London” to Labour Party plaudits. Odd isn’t it that Lady Porter had to cough up a £12 million fine for operating an analogous policy in Westminster.

    Reply
  7. Bob B Avatar
    Bob B

    More to the point, the EU has a persistent history of using supposedly anti-dumping measures as an instrument of what would otherwise be blatant protectionism. Beyond dispute is that Britain has a long and honourable history of opposing this – try table 5 in:
    “The Politicisation of EU Anti-Dumping Policy”
    http://www.evenett.com/articles/evenettvermulst2.pdf
    John Stuart Mill, a staunch advocate of free trade nevertheless recognised two valid cases for tariffs:
    “John Stuart Mill proved that a country with monopoly pricing power on the international market could manipulate the terms of trade through maintaining tariffs, and that the response to this might be reciprocity in trade policy. Ricardo and others had suggested this earlier. This was taken as evidence against the universal doctrine of free trade, as it was believed that more of the economic surplus of trade would accrue to a country following reciprocal, rather than completely free, trade policies.
    “This was followed within a few years by the infant industry scenario developed by Mill anticipated New Trade Theory by promoting the theory that government had the ‘duty’ to protect young industries, although only for a time necessary for them to develop full capacity. This became the policy in many countries attempting to industrialize and out-compete English exporters.”
    http://en.wikipedia.org/wiki/American_trade
    http://post.economics.harvard.edu/faculty/melitz/papers/infant_JIE.pdf
    But the EU can hardly claim that the European shoe industry fits the exceptions that Mill had in mind.

    Reply
  8. dearieme Avatar
    dearieme

    Umbongo: unfair. Lady Porter diverted housing to people who, she hoped, might prove to be Tory voters. Council housing was long given to individuals known to be Labour voters. Quite different.

    Reply

Leave a Reply

Discover more from Tim Worstall

Subscribe now to keep reading and get access to the full archive.

Continue reading