News Release

November 26, 2002

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Trade Expert Calls Bush Tariff Plan Bold and Gutsy
Cato scholar welcomes global "duty-free zone for manufactured goods"

The Bush administration announced today a bold new proposal to eliminate tariffs on industrial goods by 2015. The proposal was made in the context of the ongoing "Doha Round" of World Trade Organization negotiations. Brink Lindsey, director of the Cato Institute's Center for Trade Policy Studies, had this comment:

"This is a bold and gutsy proposal. It aims to finish the job begun over a half-century ago with the formation of the General Agreement on Tariffs and Trade: the conversion of the world into a duty-free zone for manufactured goods.

"But make no mistake about it: The Administration's proposal is going to face a buzz saw of opposition. Domestically, the textile and apparel industries are the primary beneficiaries of the remaining high U.S. tariffs, and they can be expected to fight tooth and nail against the erosion of their protectionist privileges. Meanwhile, internationally, most developing countries continue to coddle so-called `infant industries' behind high tariff walls, and so it will be politically difficult to build support in those quarters for a zero-tariff world.

"It should be noted that the administration's proposal for duty-free trade in industrial goods has a big red asterisk: the so-called `trade remedy laws' -- including the antidumping, countervailing duty, and safeguard laws -- that allow the United States and other countries to impose punishingly high special duties on politically sensitive imports. Unless a parallel effort is made to close or at least tighten those loopholes, the U.S. proposal will turn out to be much less bold than it now appears. It won't matter that normal tariffs on textiles are zero if double- or triple-digit antidumping duties continue to choke off access to the U.S. market.

"With that caveat, the Bush administration deserves real credit for its proposal today. Over and above its effect on WTO negotiations, this proposal commits the administration to making the political case here at home for the benefits of imports and open U.S. markets. That marks a dramatic departure from trade politics as usual, where all the focus is on improved access abroad for U.S. exporters while the benefits of free trade here in the United States are given short shrift."

Lindsey is the co-author of the new Cato study, "Antidumping 101: The Devilish Details of `Unfair Trade' Law".