What good's a trade agreement if you don't enforce the on-the-books trade rules?

Posted by mmcmullan on 03/11/2014

Late last month, a U.S. Steel facility in Lorain, Ohio announced the layoffs of 50 employees. The decision to eliminate those jobs, according to a company statement, was based on an analysis of business conditions:

'While we have made every effort to maintain employment levels at our operations, unfortunately we must now adjust our work force to match our production levels,' the company statement said.

Indeed, that is unfortunate. But these decisions aren’t made in a vacuum. And this one came a week after the Department of Commerce (DOC) rejected the company’s claim that South Korea is dumping Oil Country Tubular Goods (OCTG) into the American marketplace. The DOC maintained tariffs on OCTG from a number of other countries, but didn’t apply any to South Korea. Observed an analyst:

‘The level of proposed duties was disappointing for domestic producers, particularly as Korea, by far the largest exporter, was assigned no proposed duties,’ Timna Tanners, a New York-based analyst at Bank of America Merrill Lynch, said in a note.

And, coincidentally, what does U.S. Steel’s Lorain facility make? Yeah, you guessed it -- OCTG pipe.

It's worth nothing that this unfortunate news comes on the two-year anniversary of the free trade agreement that the U.S. signed with South Korea. Make no mistake: The Alliance for American Manufacturing (AAM) is all for trade. But that comes with the important stipulation that enforcement of standing trade rules must continue to be applied. When that doesn’t happen, there are troubling repercussions. American jobs are put at stake.

Also of note: Our neighbors to the north are hoping not to learn lessons about poorly planned trade agreements the hard way. Both the head of Ford Canada and the premier of Ontario have expressed concerns about the deal that the Harper government just signed in Seoul.

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