Kelsey Zahourek

What's That You Say About Avoiding Protectionism, Obama?


Posted by Kelsey Zahourek on Friday, November 6th, 2009, 5:00 PM PERMALINK

It has become a cliché to say that history repeats itself, but sometimes the phrase is troublingly applicable. After tariffs on poultry, and then tires, now steel pipes have drawn the ire of the Obama Administration. The White House announced on Thursday that the United States will now impose import duties as high as 99% on Chinese steel. It seems funny that the President would vow to avoid the evils of protectionist policy, yet escalate a burgeoning trade war with our second biggest trading partner. 
 
The duty will have a dramatic effect on the cost of many manufactured goods, as well as fossil fuels. Big labor scored another victory in the fight against free and open trade. This is the second tariff to be imposed at the direct request of the bosses of the United Steel Workers, after last month’s tire tax. The Obama Administration claims to want to create jobs, yet they persist upon imposing barriers to trade that will drive up costs for employers, and inevitably lead to cutbacks, and layoffs. Unemployment is at a twenty-five year high, and continues to rise. Now, the price of steel will too.
 
Click here to read ATR's press release

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Obama's Do As I Say (Not As I Do) Trade Policy


Posted by Kelsey Zahourek on Friday, September 25th, 2009, 1:27 PM PERMALINK

As the G20 meets in Pittsburgh, many will be looking to the United States and the Obama Administration to outline its trade policy. President Obama claims to be a supporter of free trade, saying it is vital to the economic health of our nation and he has repeatedly called for countries to avoid protectionism. Unfortunately, those encouraging words are being followed up with less encouraging actions when it comes to trade under this Administration.

First came “Buy American” in the stimulus bill, requiring manufacturers to give preferential treatment to domestic producers of iron, steel and other manufactured goods in building contracts and other spending, forcing taxpayers to pay more money for the same goods that could be purchased more cheaply from foreign manufacturers. What followed were similar actions by countries such as Australia, Canada, and China.
 
Then, bowing to pressure from organized labor, Congressional Democrats included within the omnibus spending bill a provision to end the pilot program to allow Mexican trucks to ship goods deep within U.S. borders, violating our obligations under the North American Free Trade Agreement. In retaliation, Mexico announced it would raise tariffs on 90 U.S. agricultural and industrial products, worth more than $2.4 billion in American goods exported to our southern neighbor. 
 
Continuing on, we have stalled free trade agreements with Panama, Colombia, and Korea. Both the Panama and Colombia FTA would level the playing field by removing trade and investment barriers that have hindered American exports to those countries. While eighty to ninety percent of imports from those countries are duty free, U.S. products still face tariffs when entering Panama and Colombia.  Additionally, the U.S. International Trade Commission estimates that enacting the Korean FTA would increase U.S. exports by $10–11.9 billion.  These agreements will eliminate trade barriers and open new markets for U.S. products. 
 
Most recently and again appeasing organized labore, Obama made the decision to place a 35 percent tariff on tire imports from China. The families hardest hit by this tax increase will be low-income families, since tariffs will be applied to low-end tires, costing $50 to $60 as opposed to the $200 to $250 paid for premium tires. As a result, Americans can expect to see a 20 to 30 percent increase in the cost of tires.
 
So what exactly is Obama’s view on trade and where is the free trade portion he claims to favor over protectionism? Unfortunately, this administration’s actions have sent a message to the American people that the interests of union supporters, too fearful to compete in the marketplace, are above the interests of consumers.
 

 

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The FCC on the Internet: If it Ain't Broke Then We Aren't Trying Hard Enough


Posted by Kelsey Zahourek on Monday, September 21st, 2009, 12:57 PM PERMALINK

Today, the Federal Communications Commisssion announced its plans to adopt network neutrality rules.   

PRA opposes any plan that could lead to so-called “network neutrality”, viewing the policy as firmly against private property rights.  Simply put, “network neutrality” would provide the federal government extensive power to mandate how businesses can provide Internet service to their consumers.  Innovation and investment in the Internet has occurred due to an absence of government regulation and interference.  Allowing the government to step in to impose mandates on network management would represent a dangerous precedent in terms of Internet regulation and a clear infringement of private property rights by government. 

To advocate for these new mandates and further government expansion, the FCC created a new website.  However dubiously named, I must say it is certainly a step up from www.fcc.gov, which appears to have been created around the same time Al Gore was inventing the internet.

Click here to view a pdf version of PRA's statement

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Don't Tread on Me: Obama Tire Tax Hits American Drivers


Posted by Kelsey Zahourek on Tuesday, September 15th, 2009, 12:04 PM PERMALINK

Late Friday night, President Barack Obama once again broke his central campaign promise not to raise “any form” of taxes on Americans making less than $250,000 per year. Bowing to pressure from organized labor, he made a decision to place a 35 percent tariff on tire imports from China.

“Make no mistake; a tariff is nothing more than a tax on consumers,” stated Grover Norquist, president of Americans for Tax Reform, “This decision will drive up the cost of tires, increasing the economic burden on families already struggling with the high cost of transportation.”
 
The families hardest hit by this tax increase will be low-income families, since the tariffs will be applied to low-end tires, costing $50 to $60 as opposed to the $200 to $250 paid for premium tires. According to the Wall Street Journal, Americans can expect to see a 20 to 30 percent increase in the cost of tires.
 
During the campaign, Obama made a “firm pledge” not to raise “any form” of taxes on those making less than $250,000 per year:
 
 “I can make a firm pledge.  Under my plan, no family making less than $250,000 a year will see any form of tax increase.  Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”(Dover, NH) [Transcript] [Video clip]
 
“This is a troubling sign as to where domestic policy is headed under Obama,” continued Norquist, “With this decision, Obama has put the interests of his union supporters, too fearful to compete in the marketplace, above the interests of taxpayers.”

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Obama Sides with Unions, Increases Prices on American Consumers


Posted by Kelsey Zahourek on Monday, September 14th, 2009, 11:37 AM PERMALINK

Late Friday night, when most people were tucked soundly away in their beds (or more likely out enjoying the beginning of their weekend), the Obama administration decided to finally set a trade policy agenda and the result sent shivers down the spines of free trade and taxpayer advocates alike.
 
Bowing to pressure from the United Steelworkers union, President Barack Obama made the decision to place a 35 percent tariff on tire imports from China. China has already signaled the possibility of retaliatory tariffs on U.S poultry and auto parts.
 
“This is trade protectionism at its worst and a worrying sign as to where trade policy is headed under the Obama Administration,” stated Grover Norquist, president of Americans for Tax Reform, “Obama has put the interests of his union supporters above the interests of taxpayers. Make no mistake; a tariff is nothing more than a tax on international commerce, increasing the economic burden on consumers, all to protect a small industry not willing to compete in the marketplace.”
 
It is equally disconcerting that the calls to enact the tariffs were made only by the Steelworkers and not the U.S. tire industry. The United Steelworkers strongly backed Obama during the election and have now decided its payback time. So the lesson learned here is Obama would rather bend to the will of special interests than do what is good for the economy as a whole.
 
President Obama’s past calls to avoid protectionism haven’t been followed-up with action in the U.S. to open markets and reduce barriers to trade. As the G20 meeting in Philadelphia draws near, President Obama has a lot of explaining to do as to why his words have been met with the oppsosite action.

Click to read ATR's press release

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Time to Unravel U.S. Cotton Subsidies


Posted by Kelsey Zahourek on Monday, August 31st, 2009, 11:56 AM PERMALINK

Today, the World Trade Organization (WTO) ruled that Brazil could set $295 million in annual sanctions against American goods entering that country in retaliation for the United States’ failure to eliminate illegal subsidies to the cotton industry. This could be good news for U.S. patent and copyright holders as Brazil had hoped to suspend their intellectual property rights at the cost of $2.5 billion.

Brazil, the world's fifth largest cotton producer, claims the United States, the world's third largest cotton producer, is able to control global cotton prices and stay at or near the top of production through its agricultural subsidies, and for the past seven years the WTO has agreed.
 
The United States pays farmers roughly $3 billion annually to grow and market cotton, robbing Joe Consumer, to pay Joe Farmer. American farmers are helped, but only at the expense of the rest of the American population, as the government must tax its citizens more in order to subsidize farmers. This cotton baron welfare program also has implications beyond our border; artificially boosting the cotton supply, driving down the price and forcing cotton farmers in developing nations out of business. 
 
The United States must realize free trade is a two-way street. The U.S. needs to adhere to its international treaty obligations and if not done, has no leg to stand on when other countries follow the same protectionist path. When states pick and choose which goods they will freely trade, its not really free trade. 

 

 

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Unions to Obama: Run Down Free Trade


Posted by Kelsey Zahourek on Friday, August 28th, 2009, 11:52 AM PERMALINK

President Obama’s calls to avoid protectionism haven’t been followed-up with action in the U.S. to open markets and reduce barriers to trade. Instead, what we have is an Administration reluctant to set any sort of trade agenda and the result is three stalled trade agreements, retaliation by governments to the U.S.’ “Buy American,” provisions, and a missed opportunity to speed up the economic recovery by enacting policies that will boost trade and make all involved better off.

In the coming weeks, President Obama must decide whether he will place a 55% tariff on tires imported from China. This would follow the recommendation of the U.S. International Trade Commission after hearing a case brought by the United Steelworkers earlier this year.
 
The United Steelworkers strongly backed Obama during the election and have now decided its payback time. The Steelworkers believe the tariffs would help U.S. tire producers increase investment in domestic manufacturing but in reality tariffs discourage industries from modernizing or becoming more efficient - why modernize when you're shielded from competition? Rather than competing in the international market, the Steelworkers want to force American drivers to pay more for goods that could be purchased more cheaply from foreign distributors.

 

 

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The Power of Property Rights


Posted by Kelsey Zahourek on Monday, August 17th, 2009, 11:33 AM PERMALINK

The Free to Choose Network has posted a short video clip titled, “Power of the Poor.” It features Peruvian economist Hernando de Soto speaking about the power of property rights in turning the world’s poor into it’s leading entrepreneurs. 

 
Creating an environment where all forms of property are safe and legally enforceable contributes to increased levels of stability and encourages the free exchange of goods and ideas. As highlighted in the 2009 edition of the International Property Rights Index (IPRI), released by the Property Rights Alliance, people in countries that protect their physical and intellectual property enjoy a GDP per capita up to nine times greater than those without legal protection. Countries that protect property rights provide an essential foundation for peace, stability and prosperity, the Index shows: its calculations cover 115 countries, representing 96 per cent of the world’s GDP.

 

 

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Rep. Bilbray and Rep. Dreier on Panama and Colombia Free Trade Agreements


Posted by Kelsey Zahourek on Thursday, July 16th, 2009, 10:52 AM PERMALINK

Last night on the House floor, California Congressmen Bilbray and Dreier spoke about the importance of passing the Colombia and Panama Free Trade Agreements, which the Obama Administration has yet to send to Congress. 

These agreements will level the playing field by removing trade and investment barriers that have hindered American exports to Panama and Colombia. While more than ninety percent of imports from those countries are duty free, U.S. products still face tariffs when entering Panama and Colombia. These FTAs will eliminate this trade barrier and open new markets for U.S. products. 

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Sotomayor's View on Property Rights? Don't Ask Her!


Posted by Kelsey Zahourek on Tuesday, July 14th, 2009, 3:56 PM PERMALINK

On day 2 of her Supreme Court nomination hearing, Sonia Sotomayor’s views on property rights continue to remain vague. Today, while undergoing questioning from Senator Chuck Grassley on whether she agreed with the Court’s 2005 ruling in Kelo v. New London, Sotomayor tiptoed around the question simply adding she respected the "right of property owners to have their day in court."

 
The United States Supreme Court decision in Kelo v. City of New London ruled that the government may use the power of eminent domain to expropriate property for private to private transfer under the ambiguous title of “economic development”. As a result of the Supreme Court’s ruling, the government’s power of eminent domain has become almost limitless, providing victimized citizens with few means to protect their property.
 
Her elusive response comes as no surprise given her rulings in past takings cases. I fear under Judge Sotomayor’s leadership, the door will continue to be left wide open to these egregious takings.

 

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