Daniel Ikenson (Cato Institute) made an insightful observation in a blog post (“WTO Indictment of Chinese Export Restrictions Unearths U.S. Hypocrisy”). Here are some excerpts from his post.
“During the last decade (2000-2009), four out of every five antidumping measures (79.4%) were imposed on imported intermediate goods. Over the past 12 months, all of the 15 U.S. antidumping investigations initiated concerned imported intermediate goods, such as ferrosilicon, chlorinated isocyanurates, calcium hypochlorite, and sugar. Access to each of these products – just like access to rare earth minerals – is essential to the competitiveness and viability of U.S. companies. Each of these inputs is the lifeblood of numerous downstream industries.”
Note that nearly a half of the current U.S. imports are the so-called intermediate goods, such as raw materials and part/components. The new trade reality is now characterized by global value chains and multi-location trade/production model, not the hoary mercantilist, mono-location trade/production model. The late Peter Drucker said that “all economics is international.” Yet the late Tip O’Neil said that “all politics is local.” The WTO system revolves around this seemingly paradoxical dyad of the multi-location trade and the mono-location politics.
