US by Greg ByrneNews Weekly
, March 23, 2002
George Bush has given the opponents of free trade the weapon they had been waiting for: proof that when it comes to the crunch the US is no less protectionist than anyone else and that countries like Australia practising free trade are on their own.
It would seem that the US steel industry is inefficient and that other nations are cheaper and better. So that Bush is protecting an industry that can't stand on its own two feet.
This is only putting off the evil day. Eventually US steel firms will be like Ansett crashing disastrously with many good people thrown on the scrap heap. There are many good steel plants around the world and eventually market forces will assert themselves and inefficient local plants whose only justification for existing is employment will go to the wall.
Like Australia the US is not much good at manufacturing except in the high tech areas where its new technology gives it the edge. But in footware, clothing, durables and automobiles expect plant closures. Let us remember that industrial plants exist to provide consumer goods, not jobs.
Australians are seeing themselves as the losers in this, which to some extent they are, but I would point out that American consumers are the losers, as are US firms which use steel as a raw material.News Weekly
will probably say that countries with industries like US steel are generating income and revenue while other nations that practise free trade are disadvantaged. However I would point out that eventually the final crash will be more disastrous. If steel companies provide expensive new plants and technology that will be more shareholders' money that will have to be written off.
With an industry like that (US Steel) you don't want to encourage the investment of scarce investment capital in an industry that can only sell its products locally and at low profit.Greg Byrne,