The Bush administration kicked off its term in office by imposing Draconian tariffs on imported wood from Canada and now it seems to likely to bookend its first term with equally stupid tariffs on Canadian pork products.
The U.S. International Trade Commission claims that Canada unfairly subsidizes hog farmers. Canadian hog farmers say that’s simply not true. Frankly, I couldn’t give a damn. Look, if the Canadian government is subsidizing hogs for export to the United States, it is basically transferring wealth from Canada to the United States — who in their right minds would want to stand up and say “stop giving us your money! We want to pay higher prices for pork products!”
Well, the Bush administration might. Pork producers are big businesses in swing states like Ohio where Dick Isler, executive vice president of the Ohio Pork Producers Council tells the Gannett News Service, “In general we have seen large numbers of producers, especially in the last two or three years, who have not been able to make a profit and as a result are not able to raise hogs any longer.”
But is this due to “unfair” subsidies? In fact, the decline in U.S. hog farms — and rise in imports from Canada — began in 1998 which, not surprisingly, also happens to be when the Canadian dollar crashed and burned compared to the U.S. dollar (I worked for a company at the time that moved all of a number of lucrative telecommunications contracts to Canadian firms strictly to take advantage of the currency savings).
The current comparative advantage that Canada has in producing some goods, such as wood or hogs, benefits both countries, but especially the United States where cheap imports can help deter inflationary pressures. This state of affairs won’t last forever, and the Bush administration would be crazy to arbitrarily tell Americans, “no, you must pay more for pork products because our farmers just can’t compete with Canadian farmers.”
Source:
U.S. panel mulls trade sanctions to stem hog imports. Greg Wright, Gannett News Service, May 8, 2004.