Nonmarket Economy Tariffs
Colorado’s Rep. Tom Tancredo (R) submitted legislation that would help fund Social Security with revenues from additional tariffs on imports from countries without market economies. According to HR 571, goods from these countries would be slapped with a 5% ad valorem tax during the law’s first year, and that tax would increase 1% every year thereafter until the president certifies that the country has a market economy. How do we determine who does and who does not have a market economy at the outset? Tancredo does the figuring for us.
(c) Definitions- In this section:
(1) NONMARKET ECONOMY COUNTRY- The term `nonmarket economy country’ means the following:
(A) Albania, Armenia, Azerbaijan, Belarus, Cambodia, Georgia, Kyrgyzstan , Laos, Moldova, the People’s Republic of China, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, and Vietnam.
(B) Cuba and North Korea, to the extent that any products of those countries enter the customs territory of the United States.
(C) Any other country that the President determines is a nonmarket economy country as defined in section 771 of the Tariff Act of 1930 (19 U.S.C. 1677).
(2) MARKET ECONOMY COUNTRY- The term `market economy country’ means a country that operates on market principles of cost and pricing structures so that sales of merchandise in such country reflect the fair value of the merchandise.
Every state in Central Asia and the Caucasus gets listed except Kazakhstan and Georgia. Sure, in all of the former Soviet states listed, the state interferes heavily in the economy. But what makes Kazakhstan’s a market economy and Ukraine, Kyrgyzstan, or Armenia’s not? I am certain that we could go on all day coming up with strange inconsistencies.
And what does it matter anyway how Tancredo has come to decide most of Central Asia and the Caucasus are to parts of the world in which one is least likely to find economies operating on market principles? His legislation gives the executive branch yet another chance to play political games with a certification process. I can almost guarantee that many of the above countries would be quickly certified.
I understand where Tancredo is coming from with such legislation. It would be nice to have another tool to support freer markets. I love free markets (most of the time). I am almost always opposed to government meddling with prices. So, if we want to be really gung-ho with this, maybe we should certify Colorado (or plenty of other states) as a nonmarket economy for accepting such massive farm subsidies.
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Tags: Diplomacy, Central Asia, Economics.
Posted by Nathan on February 13th, 2007
Permalink | Trackback | Comments: 6
Comments
Time: 2/13/2007, 1:55 pm
Actually Georgia is listed too. That’s just what they and Kyrgyzstan need right now.
I’m thinking that right after they wrote down “Republic of China” they didn’t put much thought into the rest of the list.
Time: 2/13/2007, 3:52 pm
Notice, too, how he neglects to mention all of MENA, plus Russia, South America, and Africa. He punts the definition by referring to the Tariff Act; why bother to list the others? Albania, too is one of those WTF places, as it is desperately in need of development, and really friendly to the U.S.
(c)(1)(C) also gives the President broad authority in leveraging tariffs, basically allowing him, aside from the illogical blacklist in (c)(1)(A), to mark any country that displeases him as “non-market” and thus subject to tariffs.
If this gets through Congress (which I’d put at 50/50), I will LOVE watching most of the WTO (esp. member countries China and Vietnam) file official complaints.
Time: 2/13/2007, 5:10 pm
Brian: I’m thinking that right after they wrote down “Republic of China” they didn’t put much thought into the rest of the list.
Now if Tancredo had put down Republic of China (aka Taiwan), that really would’ve caused a stink … but as it, there’s a note in the original bill excluding Taiwan from the definition of China.
I think this bill resembles an early-day motion in the House of Commons (UK), where an MP suffering from ADD puts down a headline-grabbing motion for debate without any expectation of legislative action.
Time: 2/13/2007, 6:21 pm
Brian, thanks for catching that.
Nick, I looked through Tancredo’s legislative record, and in the 109th Congress, he was part of a resolution to resume normal diplomatic relations with Taiwan (Res. 69). Res. 76 was another he was on. It also supported Taiwan. I’m sure there’s much more to be found…
Josh, regarding MENA, he’s on the Africa subcommittee. I wonder if that has anything to do with his lack of listing African states.
Time: 2/13/2007, 6:27 pm
Nathan, as far as I’m concerned, that just makes his proposal all the more boneheaded: how could Zimbabwe, among many others, not make the list?
I’m not surprised Tancredo did something boneheaded - he’s done that before. But I am worried this might pass. Because then the WTO will grant retaliatory tariffs, and the U.S. will have ruined yet another part of her reputation for nothing other than petty grandstanding.
Time: 2/13/2007, 12:55 pm
Zing! His proposal my look attractive to some voters. Clever using it to fund social security.