Posts Tagged ‘free trade’

NAFTA not nannyish enough for NYT

Advocates claiming the mantle of public health would like to introduce scary new warnings on foods high in sugar, salt, or fat, and restrict marketing, as by banning the use of cartoon characters. For years they’ve been trying to advance their schemes through the use of international organizations and institutions, but now the United States, or at least its federal government, has begun pushing back. The New York Times doesn’t like that one bit and my latest Cato post examines the difference between what a principled position might look like, and the position the Times actually takes. Excerpt:

Like international organizations, treaty administration bodies tend to draw for guidance on an elite stratum of professional diplomats, conference-goers, NGO and nonprofit specialists, and so forth, most of whom are relatively insulated from any pushback in public opinion. That might be a good reason to minimize the role of transnational panels in governance where not absolutely necessary. It is not a good reason to adopt the Times’s implicit position on lobbying for international standards, which is that it’s fine when done by our side but illegitimate when done by yours.

Related: Good piece on sugar/fat wars, with one proviso: when it’s Stanton Glantz spreading a tale, don’t just call it “University of California” [David Merritt Johns and Gerald M. Oppenheimer, Slate]

President imposes steel and aluminum tariffs

“Despite the myth that US manufacturing is in decline — and despite the very real decline in manufacturing employment— US industrial output is nearly double what it was 30 years ago. Very often, American manufacturers are in the business of making things out of steel and aluminum.” [Josh Barro] While, to paraphrase Trotsky, you may not be interested in trade war, trade war is interested in you [Axios on prospects for retaliation and economic damage] On the aluminum angle, Virginia Postrel in November. On the defense angle: Peter Coy, Bloomberg. More commentary: Dan Ikenson/Cato, Mickey Levy/Manhattan Institute. Will Trump quietly change course, as he earlier reversed an order that the Keystone XL pipeline be built only with American steel? [Simon Lester]

I’m quoted saying “that the tariff decision could be a big step backward for U.S. economic policy under Trump” [Trey Barrineau, trade journal DWM Magazine]:

Walter Olson, a senior fellow with the libertarian Cato Institute in Washington, D.C., said in a Facebook post on Friday that the tariff decision could be a big step backward for U.S. economic policy under Trump.

“There are few topics on which economists of different stripes are as unanimous in their opinion as in their disapproval of protectionism and tariffs,” he said. “It would take only a few policy mistakes like this to cancel out a lot of the positive economic value contributed by this administration through such measures as regulatory relief, tax reform, and permit streamlining.”

The U.S. Constitution entrusts tariff policy squarely to the legislative branch, so if senators don’t like how Trump is handling things, they should promptly repeal the laws they passed delegating their power to him, and instead take back for themselves direct authority over the issue [Ira Stoll] “It’s time for Congress to step up to the plate.” [Colin Grabow, The Hill]

State of the Union address 2018 live-tweets

I live-tweeted President Trump’s address last night (text) and here are some highlights:

More on family leave here.

December 20 roundup

  • Craft brewery regs, Peter Angelos has another special bill in Annapolis, county council vetoes on development, and more in my latest Maryland roundup [Free State Notes]
  • Oh, that pro bono: celebrity lawyer’s pro bono contract for sex accusers included up to one-third commission on selling their stories to media outlets [John Solomon and Alison Spann, The Hill]
  • Forget that Viking cruise down the Mississippi River, Jones Act makes it a no-go [WQAD] “The Jones Act costs all Americans too much” [Bloomberg View editorial; earlier here, etc.]
  • Cato Daily Podcast with firearms policy expert David Kopel on interstate right to carry and restricting bump stocks;
  • Not-so-nastygram in beer biz: “As far as cease and desists go, this is about as good as it gets.” [Timothy Geigner, TechDirt]

Between Puerto Rico and food shipments, the Jones Act

After a brief suspension during the moment of maximum public outcry, the Trump administration earlier this month allowed the Jones Act to go back into effect restraining trade between Puerto Rico and the U.S. mainland. According to this WSJ editorial, Puerto Ricans are paying the price:

Ricky Castro is a food and beverage wholesaler and president of Puerto Rico’s Chamber of Food Marketing, Industry and Distribution, known as MIDA, which boasts 200 members across the island. This month MIDA conducted an informal survey of 15 members and found there are roughly 1,400 containers of their provisions sitting in U.S. ports, waiting to be shipped to Puerto Rico.

Mr. Castro attributes the delay to the Jones Act, which mandates that U.S.-flagged, -built and -manned carriers conduct all shipping between U.S. ports. This means an oligopoly of three companies—Crowley Maritime Corp., TOTE Maritime and Trailer Bridge Inc.—conduct the vast majority of the protected trade between the mainland and the island, at inflated costs on aging ships. The ocean-going Jones Act fleet numbers a mere 99 vessels, compared to thousands available from foreign-flagged carriers.

Earlier here, here, here, etc.

“The £400,000 comma”

Is it a true story? It is at the least a widely circulated old story that many persons would have been in a position to correct if untrue. Here is a 1928 version [via Jot 101]

Solicitors in their private practice have evolved a language of their own, which weird though it may be, is seldom open to the reproach of obscurity. Very wisely they discard punctuations almost completely. They know that the omission or use of a comma in a legal document can be dangerous. A comma once cost the United States Government £400,000. It was nearly fifty years ago that the United States Congress in drafting a Tariff Bill enumerated in one section the articles to be left free of duty. Amongst these were “all foreign fruit-plants”. The copying clerk in his wisdom removed the hyphen and substituted for it a comma, making the clause read “all foreign fruit, plants, etc.” It took a year to rectify the error, and during that period all oranges, bananas, grapes, and other foreign fruits were admitted free of duty with the big loss to the State already mentioned…

Here’s another reference to the story, and many more can be found at this search.

Puerto Rico: Administration won’t extend 10-day Jones Act waiver

Protectionism for the benefit of stateside shipping interests wins out over the rescue-and-rebuild interests of Puerto Rico and its citizenry. And yes, non-Jones ships have already been coming to help in the island’s Hurricane Maria recovery, so forget the claim heard last week that lack of port capacity and the availability of U.S. government vessels makes the law irrelevant. [Scott Shackford, Reason, earlier here and here] And given the Act’s impact on consumers in Hawaii and Alaska, how can it be that all four members of the Hawaii congressional delegation, and two of the three from Alaska, are stalwart backers of the law? [Colin Grabow, Cato] More: Tyler Cowen.

Jones Act and Puerto Rico, continued

Ten day suspension more than halfway over already, time to refocus: the Jones Act “is a swamp creature that’s strangling Puerto Rico” [Colin Grabow, USA Today] The Act’s inefficiencies cost America many jobs, but they’re harder to identify than the jobs “saved” [Ike Brannon] An aged fleet [Thomas Firey on Regulation magazine analysis] A drag on the energy sector [James Coleman, Regulatory Transparency Project] Only two Washington problems are amenable to easy and correct solutions: simplify the tax code and get rid of the Jones Act [Ray Lehmann, R Street] More: Matt Yglesias. Earlier here.

Puerto Rico recovery after Hurricane Maria: waiving the Jones Act

The 1920 Jones Act confines shipping traffic between US ports to US-flag, US-crew ships. That includes traffic between the mainland and outlying islands. It’s onerous for Puerto Rico in the best of times and now, in the emergency following the devastation of Hurricane Maria, much worse than that.

The Department of Homeland Security waived the Act beginning Sept. 8 in a limited manner for the purpose of allowing oil shipments to reach areas of Texas and Florida hit by Hurricanes Harvey and Irma. Those waivers expired Sept. 22. On Sept. 25 DHS announced that it would not waive the act for Maria and Puerto Rico even for the limited purpose of oil shipments, let alone general relief. DHS says it thinks most relief supplies for Puerto Rico from the U.S. will be sent by barge and it thinks there will be enough U.S.-flag barges available.

My Cato colleague Nicole Kaeding wrote two years ago that due to the Act, “goods coming from the mainland [to Puerto Rico] can’t come on the most cost-competitive vessel. They must go with one of four U.S. shippers operating that route. The limited competition increases costs. Puerto Rico’s shipping costs are twice those of its island neighbors, making items more expensive to purchase on the island. It also limits Puerto Rico’s ability to export its products to the mainland.”

Now the restrictions also mean that, say, a Norwegian- or Liberian-flagged vessel loaded up in Jacksonville or Savannah with relief supplies will not be allowed to unload them in Puerto Rico, no matter how much port capacity may have reopened there.

Rep. Nydia Velasquez (D-N.Y.) has called on President Trump to suspend the operation of the act for a year to reflect the current emergency, and that should be just an opening bid: Congress should move to repeal the law. Easier said than done: the Act, which also greatly drives up costs for Americans in places like Hawaii and Alaska, is tenaciously defended by U.S.-flag shipping interests and associated labor unions. Inertia, and the special interests that grow up around an existing law that protects some livelihoods, are powerful things. Critics of the Act, including Sen. John McCain (R-Ariz.), have made little headway. Trump, on Wednesday, on why he has hesitated: “a lot of people that work in the shipping industry… don’t want the Jones Act lifted.”

See also Amber Phillips/Washington Post “The Fix” (with link to Overlawyered), Nelson Denis, New York Times (“The Law Strangling Puerto Rico”), Henry Grabar/Slate, Michael Tanner/NRO. Marc Scribner/CEI, and this new WSJ editorial (“DHS argues that under U.S. law the agency can’t ask for a waiver unless there’s a national defense threat and there aren’t enough Jones Act-compliant ships to carry goods. That may or may not be a cramped reading of the law by DHS, but the Department of Defense has fewer legal constraints. Defense Secretary Jim Mattis could simply find a Jones Act waiver is ‘necessary in the interest of national defense.’”)

UPDATE: This morning the White House announced a 10-day suspension of the act. A 10-day suspension itself means very little when set alongside the magnitude of the need in Puerto Rico, so let’s hope this is just the prelude to a longer term fix. I did appearances this morning on CBS Streaming and WNYC/WGBH “The Takeaway” to discuss the issue.

States’ boycotts of states, cont’d

“California state university researchers are banned from using funds to travel to Texas to study Harvey’s aftermath.” — Joshua McCabe on Twitter. The guidelines from California Attorney General Xavier Becerra do cite the legislature’s allowance of a number of narrow exceptions including travel that is “required…for the protection of public health, welfare, or safety, as determined by the affected agency.” The cited project, however, might not make it past that tough standard, given that it is possible in principle to wait and study flood aftermaths in some other place that (unlike Texas) is not under legislated California sanctions.

All of which should remind us that boycotts of states by other states 1) operate like internal trade barriers; 2) do not do much for national unity. See earlier posts from April 2015 (would Constitution provide any remedy if states closed state university systems to residents of “bad” states?); April 2016 (logic of lifting sanctions against Cuba extends to sanctions against Texas and North Carolina).