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America's Unfairest Taxes: Tariffs And Quotas

1 Federal News Service, headline, press conference with Lee Iacocca, chairman of Chrysler Corporation; Harold "Red" Poling, chairman of Ford Motor Company; and Robert Stempel, chairman of General Motors Corporation, during President Bush’s Asian Tour, Tokyo, Japan, January 7, 1992.back

2 Paul Blustein, "Unfair Traders: Does the U.S. Have Room to Talk?", Washington Post, May 24, 1989.back

3 Office of the U.S. Trade Representative, "U.S. Proposal for Uruguay Round Market Access Negotiations," March, 1990, p. 416 (tariff line 9108.91.20). The official Harmonized Tariff Schedule of the United States does not provide the ad valorem percentage for many tariff categories, listing instead only the kilogram or piece rate. The "U.S. Proposal for Uruguay Round Market Access Negotiations" provides ad valorem rates for all tariff categories. This is a confidential document obtained by the author.back

4 Ibid., p. 88 (tariff line 2401.30.60).back

5 Office of the U.S. Trade Representative, Trade Policy Staff Committee, hearing on Uruguay Round Tariff Reduction Proposals, November 1, 1989, p. 2-237.back

6 U.S. Congress, Senate Finance Committee, Miscellaneous Tariff Bills 1986, May 8, 1986, (Washington: Government Printing Office, 1986), p. 21.back

7 Dave Larsons, "The Cost of Import Protection in the United States," U.S. Treasury Department, 1979; cited in Michael Finger, H. Keith Hall and Douglas Nelson, "The Political Economy of Administrative Protectionism," American Economic Review, Vol. 72, No. 3, June 1982, p. 453.back

8 David Tarr and Morris Morkre, "Aggregate Cost to the United States of Tariffs and Quotas on Imports," Federal Trade Commission, 1984.back

9 Martin Wolf, "Why Voluntary Export Restraints? An Historical Analysis," The World Economy, 12, No. 3, September 1989, p. 284. Wolf was citing a 1984 study by the Trade Policy Research Centre.back

10 U.S. International Trade Commission, "The Economic Effects of Significant U.S. Import Restraints, Phase III: Services, " ITC Publication No. 2422, September 1991, p. vi.back

11 U.S. Customs Service, Harmonized Tariff Schedule of the United States 1990 (Washington: Government Printing Office, 1990); and other sources.back

12 But on imitation brandy the Customs Service levies a 97.7 percent tariff, a policy that has helped persuade street people to stop drinking imitation brandy.back

13 William R. Cline, The Future of World Trade in Textiles, p. 193 (Washington D.C.: International Economics, 1987)back

14 Brief of the National Retail Merchants Association, "The Economic Effects of Significant U.S. Import Restraints," filed with the U.S. International Trade Commission, Investigation No. 332-262, April 17, 1989, p. 10.back

15 Estimate of the United States Association of Importers of Textile and Apparel. See Office of the U.S. Trade Representative, Trade Policy Staff Committee, "Statement of United States Association of Importers of Textiles and Apparel on Reduction of Duties and Elimination of Nontariff Measures in the Uruguay Round," October 17, 1989, p.13.back

16 See Task Force Report, "Progressive Environmentalism: A Pro-Human, Pro-Science, Pro-Free Enterprise Agenda for Change," National Center for Policy Analysis, NCPA Policy Report No. 162, April 1991.back

17 Interview with Mary Harris, Information Office, National Institute of Health, Washington, D.C., January 25, 1991; also, interview with Pat O’Connor, National Kidney Foundation, New York, January 25, 1991.back

18 U.S. Congress, House Ways and Means Committee, Written Comments on Certain Tariff and Trade Bills, November 10, 1989 (Washington: Government Printing Office, 1989), p. 8.back

19 U.S. International Trade Commission, "Memorandum to the Committee on Ways and Means of the United States House of Representatives on H.R. 4411, A Bill to Reduce the Duty on Certain Fabrics for Use in Making Fire-Protective Garments for Firefighters," July 14, 1988.back

20 Interview with U.S. Customs Service spokesman, October 21, 1990.back

21 U. S . Commerce Department, Textile and Apparel Categories Correlation with the Harmonized Tariff Schedule of the United States (Washington: Commerce Department, 1991)back.

22 General Agreement on Tariffs and Trade, "Arrangement Regarding International Trade in Textiles, " 1974, p. 9.back

23 Ibid.back

24 Craig R. Giesse and Martin J. Lewin, "The Multifiber Arrangement: Temporary Protection Run Amuck," Law and Policy in International Business, 19, No . 1, 1987, p. 125.back

25 Gary P. Sampson, "Pseudo-Economics of the MFA - A Proposal for Reform," Journal of World Trade, 10, No. 4, December 1987, p. 455.back

26 Federal Register, April 8, 1988, p. 11693.back

27 Federal Register, June 2, 1989, p. 23682.back

28 Federal Register, April 8, 1988, p. 11693.back

29 Federal Register, September 5, 1989, p. 36851.back

30 Clyde Farnsworth, "Fuss Over a Diaper Import Quota," New York Times, May 31, 1988.back

31 Warren Brookes, "The Deadly Legacy of Trade Quotas," Washington Times, June 24, 1989.back

32 Farnsworth, "Fuss Over a Diaper Import Quota."back

33 International Trade Reporter, January 3, 1990, p. 10.back

34 Interview with textile trade expert who wished to remain anonymous, February, 24, 1990.back

35 U.S. Customs Service, Ruling Letter HQ 086022, February 15, 1990.back

36 "Statement of United States Association of Importers of Textile and Apparel on Reduction of Duties and Elimination of Non-Tariff Measures in the Uruguay Round," brief submitted to the Trade Policy Staff Committee, Office of the U.S. Trade Representative, October 15, 1989.back

37 Dennis Melamed, "U.S. Textile Laundering Probe Big Shot in Arm for Customs," Journal of Commerce, March 11, 1991.back

38 Interview with textile trade expert, January 24, 1991.back

39 The White House, Economic Report of the President (Washington: Government Printing Office, 1989), p. 172.back

40 U.S. International Trade Commission, "The Economic Effects of Significant U.S. Import Restraints, Phase 1: Manufacturing," ITC Publication No. 2222, October 1989, p. 4-2.back

41 Congressional Record, September 8, 1988, p. 511971.back

42 Irene Trela and John Whalley, "Unraveling the Threads of the MFA," in Carl B. Hamilton, ed. Textile Trade and the Developing Countries (Washington: World Bank, 1989), p. 24.back

43 Jan Tumlir, Protectionism (Washington: American Enterprise Institute, 1985), p. 2.back

44 USDA, "Handbook on Section 22 Dairy Quotas," p. 1, ff.back

45 James Bovard, "Blame Export Subsidies for High Milk Prices," Newsday, November 20, 1989.back

46 Editorial, New York Times, September 15, 1951.back

47 USDA, "Handbook on Section 22 Dairy Quotas," p. 10.back

48 Code of Federal Regulations, 6.44 Subtitle A, January 1, 1989 edition (Washington: Government Printing Office, 1989), p. 222.back

49 Estimated Tariff Equivalents of U.S. Quotas on Agricultural Imports and Analysis of Competitive Conditions in U.S. and Foreign Markets for Sugar, Meat, Peanuts, Cotton and Dairy Products (Washington: U.S. International Trade Commission, 1990), p. xvi.back

50 Estimates of Producer and Consumer Subsidy Equivalents. Government Intervention in Agriculture, 1982-87 (Washington: U.S. Department of Agriculture, 1990), p. 310. The consumer costs per year ranged from a low of $5.1 billion in 1983 to a high of $7.025 billion in 1984.back

51 Ibid., p. 38.back

52 Congressional Record, March 19, 1991, p. 5 3505.back

53 Henry Lee, An Exposition of Evidence in Support of the Memorial To Congress (Boston: Boston Press, 1832), p. 25.back

54 Rep. Byron Dorgan (D-ND) in the Congressional Record, September 26, 1985, p. H7823.back

55 U.S. Department of Commerce, United States Sugar Policy - An Analysis (Washington: Government Printing Office, 1988), p. v.back

56 Clyde Farnsworth, "Candymaker Dealt Blow on Sugar Quotas," New York Times, May 8, 1990.back

57 Congressional Record, May 17, 1989, p. E1738. Insert by Rep. John Porter (R-IL ).back

58 U.S. Department of Commerce, United States Sugar Policy, pp. vii ff.back

59 Bruce Ingersoll, "Inequities in Farm Program Anger Minnesota Farmers," Wall Street Journal, June 26, 1990.back

60 Gary Hufbauer, Diane Berliner and Kimberly Elliott, Trade Protection in the United States (Washington D.C.: Institute for International Economics, 1986), p. 315.back

61 Estimated Tariff Equivalents of U.S. Quotas on Agricultural Imports and Analysis of Competitive Conditions in U.S. and Foreign Markets for Sugar, Meat, Peanuts. Cotton and Dairy Products (Washington: U.S. International Trade Commission, 1990), ITC Publication No. 2276, p. xvi.back

62 James Bovard, "Trade Nuttiness," Wall Street Journal, December, 1990.back

63 Ibid.back

64 Hufbauer, Berliner and Elliot, Trade Protection, p. 24.back

65 Estimates of Producer and Consumer Subsidy Equivalents, p. 298.back

66 Charles Collyns and Steven Dunaway, "The Cost of Trade Restraints: The Case of Japanese Automobile Exports to the United States," International Monetary Fund Staff Papers, 34, No. 1, March 1987, p. 159.back

67 Organization for Economic Cooperation and Development, The Costs and Benefits of Protection (Paris: Organization for Economic Cooperation and Development, 1985), p. 97.back

68 Joseph White and Jacqueline Mitchell, "Detroit Rolls Out Old Ploy: Quotas," Wall Street Journal, January 14, 1991.back

69 OECD, The Costs and Benefits of Protection, p. 15.back

70 Study by Winston and Associates, "Blind Intersection?," pp. 64-65. Cited in Robert Crandall, "The Effects of U.S. Trade Protection for Autos and Steel," Brookings Paper on Economic Activity, 1987, No. 1, p. 287.back

71 William Niskanen, Reaganomics (New York: Oxford University Press, 1988), p. 140.back

72 Bradley Stertz, "Big Three Boost Car Quality But Still Lag," Wall Street Journal, March 27, 1990.back

73 Ibid.back

74 Ibid.back

75 Ibid.back

76 Fred Bruning, "Demand for Action; Auto Execs Target Japan, Defend U.S. Workmanship," Newsday, January 8, 1992.back

77 Paul Blustein, "Japan Takes Some Heat on Car Exports," Washington Post, April 4, 1991.back

78 Christopher Chipello, "U.S. Tells Japan to Use Restraint in Auto Prices," Wall Street Journal, April 4, 1991.back

79 A.E. Cullison, "Japan Unlikely to Heed Big 3’s Plea on Autos," Journal of Commerce, March 27, 1991.back

80 Michael Hirsh, "Nissan Chief Critical of U.S. Automakers," Associated Press, January 28, 1992.back

81 James Bovard, Wall Street Journal, October 15, 1990.back

82 Ibid.back

83 Federal News Service, news conference with Sen. Donald W. Riegle, Jr. (D-MI) regarding Japan and the U.S. Economy, Senate Radio and TV Gallery, Washington, DC, January 10, 1992.back

84 PR Newswire, statement from Chrysler Corporation regarding new Japanese VER, March 19, 1992.back

85 PR Newswire, GM spokesperson’s statement on Japanese voluntary export restraints, March 19, 1992.back

86 Japan Economic Newswire, "Congress, Detroit React Caustically to Export Restraint," March 20, 1992.back

87 Interview with Walker Pollard, March 27, 1992.back

88 International Trade Commission, International Economic Review, cited in Capitol Comment, No. 77, January 23, 1992.back

89 Dorothy Christelow, "Japan’s Intangible Barriers to Trade in Manufacturers," Quarterly Review, Federal Reserve Bank of New York, Winter 1985-86, pp. 11-18.back

90 U.S. International Trade Commission, "Pros and Cons of Initiating Negotiations with Japan to Explore the Possibility of a U.S.-Japan Free Trade Area Agreement," ITC Publication No. 2120, September 1988, p. 24.back

91 Kyodo News Service, "Ford to Apply to Japanese Development Bank for Low-Interest Loan," January 13, 1992.back

92 Colin Nickerson, "Many Firms in Japan Prove Tough Trade Barriers a Myth," Boston Globe, January 9, 1992.back

93 Ralph Waldo Emerson, The Conduct of Life (Boston: Houghton Mifflin, 1888), p. 85.back


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ref="s171n.html#85">85 The United Auto Workers denounced the export cutback as "yet another hollow gesture from Japan."86 Yet the cutback in auto exports could have a heavy impact on American consumers. The U.S. International Trade Commission's Walker Pollard estimates that the cutbacks could add up to $1,000 to the cost of a new Japanese car in the United States.87