E-Mail from Senator Stabenow; My Response

Today I received the following E-mail from Senator Debbie Stabenow of Michigan, with the text of a letter she sent to President Obama, complaining of unfair trade practices in the implementation of “cash-for-clunkers” programs in Japan and Korea:

Dear Pete,

Earlier today, Senator Debbie Stabenow sent a letter to President Obama urging him to call for Prime Minister Yukio Hatoyamaof Japan and President Lee Myung-Bakof South Korea to follow their WTO obligations at the upcoming G-20. Both countries have continued to discriminate against American automakers at great cost to businesses and workers across the country.

Full text of the letter is below:

September 18, 2009

 

President Barack Obama
The White House
1600 Pennsylvania Avenue, NWWashington, DC 20502

Dear President Obama,

When we put together the CARS Program (more commonly known as “Cash for Clunkers”), we followed international law and made it apply to allcars sold in the United States – not just American cars, which is what I and most of my constituents would have greatly preferred.

Instead, we followed the law, and the CARS Program was written to abide by our international agreements. That is why it is so outrageous that Japan and Korea would have the audacity to implement similar programs that discriminate against American automakers.

In Japan, a tangle of complicated paperwork keeps American cars from being eligible. Cars purchased in their program must get “Type Approval” to qualify, but importers commonly use a different method of certification, known as the Preferred Handling Procedure. Cars with this PHP certification are not eligible for Japan’s program, thus excluding almost all American-made cars.

In Korea, any car that is 10 years or older can be turned in for a tax incentive toward the purchase of a new car. This sounds great – except that in Korea, imports face numerous non-tariff trade barriers effectively capping all foreign imports at 5 percent, meaning that American cars are essentially disqualified from the purchase program.

When you meet with Prime Minister Yukio Hatoyamaof Japan and President Lee Myung-Bakof South Korea at the upcoming G-20, I strongly urge you to remind them of their obligations under the WTO. Over the years, you and I have worked together to hold countries accountable who ignore their trade agreements. We cannot allow other countries to violate trade rules and harm American Businesses and American workers, who are the backbone of our middle class.

I look forward to working with you to truly create a level playing field on trade.

Sincerely,

Senator Debbie Stabenow

The following was my response to Senator Stabenow:

The real problem with our trade policy is that it fails to account for the role of population density in driving huge trade imbalances. Of course the Koreans and Japanese exclude American cars from their markets. Their markets are so emaciated by over-crowding that even their domestic manufacturers have trouble selling cars there.

The ONLY way to restore a balance of trade and stop the parasitic predation of the American market is to abandon the WTO and return to a system of tariffs that will assure the restoration of balance.

How long will we continue to pursue this failed free trade model? What will it take to force a change? Apparently a cumulative trade deficit of $9.5 trillion, compiled over the past thirty-three years of consecutive trade deficits, still isn’t enough to do the job.

I’m afraid there’s no hope for our economy as long as our lawmakers allow the rest of the world to play us for fools.

Pete Murphy

Author, “Five Short Blasts”
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2 Responses to E-Mail from Senator Stabenow; My Response

  1. jeryl jordan says:

    Engagement is the policy of coming down from the pinnacles of wealth and privilege and exposing ones’ self to the risks of the disadvantaged. The evolution of implementation of this policy cannot be aborted because of difficulties or setbacks. The principle of the unity of the human condition demands an empathic response from those fortunate to be born in abundance. The 10% drop in the standards of the richest 3% is compared to the .5% rise in the standards of a quarter of the other 97%. And due to globalization ‘Free Trade’ rather than fair trade, higher amounts of the transfer of wealth were realized by the stockholders than the developing nations whose environments are paying the cost. The evolution of the implementation of the policy of engagement needs to continue. The first steps were half hearted and self serving. Real moral courage to enforce sharing of benefits and sacrifices while protecting the naive and defenseless would help ensure that profiteering would be minimized.
    Many times in history, the call has gone out to ‘… Raise the bridges and fill the moats. If we don’t protect what we have, nobody will have anything!’ Generations of industrialized nations have built expanding economies that supported ever rising standards of living for so long that it seems a right that every child might have more than the parents, and have it now. The hidden costs of world environmental and resource exploitation by the few and speculative paper valuation of the instruments of predatory lending have exploded the myth of the pyramid scheme of unending growth amid finite resources. Although painful for the member, corrections can be therapeutic for the whole if wisely implemented. Instead of grasping for always more we can release some of our bounty, for such it must seem to 97% of the planet’s inhabitants. If I eat one less meal per day, it may be that a family may eat one more meal a week. Isn’t that a significant transfer of wealth? A 25% cut in discretionary income for the few could mean a 10% cut in deaths from starvation. What could be more significant?
    In literature and in history, we see the judgment of isolationism. Nero fiddled while Rome burned, and in The Masque of the Red Death, Poe’s revelers futilely sought to escape the outside horror, protected by wealth and barriers. Ultimately we are trapped here with those who would have the same as we, and would without qualm destroy OUR habitat to get it. The most powerful of the the world CAN be torn down by starving hordes with paving stones. Witness the French monarchy, the Chinese Long March, and the American Patriots. Let not the Siren call of fear of loss of privilege shrilly drown the quiet, heartfelt call of concern for the suffering. The imbalance WILL be righted. The longer its postponement, the more resounding the crash. It is morally and financially wiser to choose our steps than to be forced by circumstances. The ostrich knows, but doesn’t act until there are no choices. Let this be a call to the Unions and the Stockholders, to give up your dollar per hour and your penny per share. To the politicians to require accountability in exchange for participation. To the people of the world to give and receive financial sacrifice with gladness instead of anger. To everyone to have patience as we strive to share all the bounty of the world, for there truly is enough and to spare for all to have sufficient.

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