An international institution you can like

The UN? NATO? The IMF? No, all of these have their problems, sometimes big ones, sometime small ones. But the WTO is A-OK in my book. Why? Because it is forcing the U.S. to accept free trade, whether we want to or not.

Most recently, today the EU and Canada announced that they will take advantage of the WTO's blessing to impose tariffs on some American exports (from MarketWatch). They are miffed over the so-called Byrd Amendment, a rule that in theory protects American companies from the effects of dumping but in practice seems to subsidize industries that just don't like foreign competition.

"Dumping" describes the practice of exporting a good to a market for sale at an unjustifiably low price. "Unjustifiably low" generally means "below the cost of producing the good." It is most often the result of subsidies to the producing industry in the exporting country, and since theoretically subsidies are bad, international trade agreements allow for anti-dumping rules, which most often take the form of a tariff on the offending goods. The Byrd Amendment allows affected companies (in practice, any company that complains loudly enough) to take a piece of the import-tariff pie collected as part of an anti-dumping policy.

So what's the problem? Dumping can be devilishly difficult to spot. Just look at aircraft manufacturers, subsidized to one degree or another by both the U.S. and the EU. Which is why this industry is not the subject of this current trade dispute. In the present case, the U.S. claimed there was dumping, while the WTO found there was not.

Which is probably true. And in fact, Bush has been trying to get the Byrd Amendment repealed for three years now, facing defeat each times at the hands of a Congress overly fond of pork. We can only hope the threat of these new tariffs will encourage Congress to keep kosher.