Vive Le Boycott!
STELZER, IRWIN M.
Vive Le Boycott! Using economic levers to reward our friends and punish our foes. BY IRWIN M. STELZER ONLY A DEMAGOGUE would say, 'Don't buy German' or 'Don't buy French,'" says Norbert Quinkert,...
...To replace deportees would raise operating costs and be a serious problem for our hospitality, agricultural, and other industries...
...Mexico is undecided whether to vote with us in the Security Council, or with the French-German peace-at-any-price axis...
...There can be no doubt that such a program would be effective in getting the business communities of Germany and France (both run a trade surplus with us) to ask their governments to reconsider the most blatant aspects of their anti-American foreign policies...
...Already there are reports of spontaneous consumer boycotts of French and German products...
...And Poland, which has selected American firms to supply its air force with fighter planes (to the consternation of the French, who have cried "politics"), should be reassured that if NATO ever hesitates to come to its aid when such assistance is needed, we stand ready to fill the gap, as we were prepared to do in the case of Turkey...
...A free trade agreement laboriously negotiated by our U.S...
...That this effort also results in the humiliation of America, Irwin M. Stelzer is a contributing editor to THE WEEKLY STANDARD, director of regulatory studies at the Hudson Institute, and a columnist for the Sunday Times (London...
...We are incurring an enormous trade deficit with China, in good part as a consequence of its policy of artificially undervaluing its currency to such an extent that it would be quite a simple matter to defend retaliation, especially against a country not famous for respecting the intellectual property rights of American firms...
...as a source of moral legitimacy...
...And Russia desperately needs an inflow of American capital and know-how if it is to develop the infrastructure needed to maximize its oil revenues...
...Then there is Chile, likely but not certain to help us achieve the majority needed in the Security Council to force France to put up or shut up by vetoing a second resolution...
...There is a middle ground between the boycotts and sanctions we impose on our enemies, and the free access to our markets that we grant to our friends...
...The carrot would be resumption of talks between Presidents Bush and Fox about legitimizing immigrants...
...Those interested in a fuller explanation should pull out their undoubtedly dog-eared copies of Adam Smith's Wealth of Nations...
...We might start by transferring some of China's textile quota to Turkey, a suggestion made to me by a top Defense Department official...
...Is it reasonable for us to use trade as an instrument to gain geopolitical advantages...
...But the important question is whether those costs are worth bearing...
...It shouldn't be difficult for American consumers who don't find California wines to their liking to discover wonderful Australian shirazes, Spanish riojas, Portuguese ports, and —depending on its vote in the Security Council—Chilean vintages to substitute for French products...
...And, should we choose, we can certainly patrol our borders with greater vigor, and interpret our NAFTA obligations more narrowly...
...interests is not a costless exercise would be another blow to the export-led recovery for which Germany is hoping...
...Then there are all those German cars...
...So Germany has placed all its hopes on expanding its export market...
...Not that the United States is without friends—witness the courageous performance of British prime minister Tony Blair in the face of massive opposition from his own party...
...A reduction of our purchases would be an extraordinarily unpleasant experience for Schroder, and would provide support to opponents of his anti-American policies...
...For the same reason, we should offer Portugal assistance in coping with the environmental consequences of the recent oil spill off its coast...
...That's the stick...
...They will insist on changes in programs, or drop their sponsorship completely if they think that a large number of well-organized consumers will stop buying the advertised product...
...Trade Representative with the Chilean government is now on the table, awaiting congressional approval...
...Germany is in recession, its official unemployment rate at 11 percent and rising...
...Surely, those talks could be resumed once the president has succeeded in eliminating Saddam and his weapons of mass destruction, and once again has time to concentrate on improving relations with our southern neighbor...
...Which brings us to what have come to be called "non-tariff barriers to trade...
...First, nothing frightens the sponsors who buy time on television networks more than the threat of consumer boycotts...
...But there is more to a foreign-policy-oriented trade policy than "putting a bit of stick about...
...And no one can deny that American and Japanese luxury cars are on a par with the once-vaunted Mercedes-Benz, a brand now struggling to regain its reputation for quality...
...These hopes have already received one blow: The euro is getting more expensive relative to the dollar, making exports more expensive and imports cheaper...
...countries that are standing with us...
...Or from the Japanese, who at one time required that each vehicle imported into the country be given a safety test—blanket approval of each brand was not allowed...
...And any E.U...
...So we should quickly agree to the free trade agreement Australia seeks, demonstrating to the world that we know how to reward our friends...
...Think of the effect of requiring large red labels, truthfully stating, "This water contains magnesium, silica, and sul-fates...
...In both cases, friends deserve treatment different from that accorded countries that specialize in tweaking the nose of Uncle Sam...
...If this be demagoguery, make the most of it...
...I did nothing to relax them...
...Selective measures designed to show Germany that Bush-bashing and opposition to important U.S...
...Australia has always been our loyal ally, fighting by our side in every war in which we have found ourselves engaged...
...Lest all of this sound harsh, keep in mind how the E.U., led by France, treats our most important non-agricultural exports, airplanes and audiovisual products...
...trade representatives privately admit that they could not sustain the ban were we to challenge it at the World Trade Organization...
...applicant that is vetoed by a petulant Chirac for supporting the United States should immediately be granted a free trade agreement with us...
...Representatives of Germany's car manufacturers were particularly nervous...
...Great Britain should be given relief from steel tariffs, and just about anything else within our gift so as to shore up Tony Blair with his electorate...
...Here we could learn a lesson from the French, who once required that all electronic products coming into the country pass through a single port of entry, manned by a single inspector, who quite understandably fell far behind in the paperwork required of importers...
...There is no prospect of a recovery of domestic demand sufficient to pull the economy out of the mire...
...None of this is to deny that it would be costly for us to deviate from bilateral and multilateral free trade arrangements...
...Lest anyone underestimate the power of such boycotts, consider this...
...But it is also costly to keep tens of thousands of troops on standby in the Gulf while France and Germany stall in the U.N., not to mention dangerous to allow the world to believe that opposition to America is a costless, fun-filled exercise...
...Call it transactional selectivity...
...limit American programs to 50 percent of TV air time...
...After a rather routine presentation of the state of the world's economies, I was peppered with questions by German businessmen about whether Schroder's performance would result in an American boycott of German-made goods...
...It would be sensible for us to suggest to the government of Mexico that American banks, which now compete to make it easier and cheaper for the legal and illegal Mexicans working here to remit billions of dollars a year to their relatives, can easily be prevented by regulators from doing that...
...These should be encouraged...
...Since we prefer to offer open access to our markets to friendly powers, it is difficult to imagine other than swift approval if Chile stands with us on a matter so important to our security...
...BY IRWIN M. STELZER ONLY A DEMAGOGUE would say, 'Don't buy German' or 'Don't buy French,'" says Norbert Quinkert, chairman of Motorola Germany...
...Many American agricultural products are verboten in Europe—no tariffs necessary to accomplish the protectionist objectives of the E.U...
...Boycotts, of course, have their limits, and might be difficult to sustain after the shooting is over in Iraq...
...If America has learned anything in the past several months it is that France and Germany are intent on ensnaring us in what Robert Kagan describes as "a world governed according to the principle of multilateralism...
...Its prime minister, John Howard, recently suffered a vote of no confidence in his upper house for sending military assets to the Gulf...
...At present, we buy more than twice as much from Germany as we sell to it and are running a trade deficit in goods of about $36 billion with Herr Schroder's nation...
...and impose taxes on movie tickets to subsidize French cinema and protect la culture from Hollywood...
...He's wrong...
...There are also carrots to be offered...
...But then, so would a refusal of the Security Council to give us the second resolution that we, and our most important ally, Tony Blair, need to satisfy those who for some reason see the U.N...
...This is an art form perfected by the French and Germans...
...The question for America, then, is one of how to reward its friends and inflict a bit of harm on its opponents, pour encour-ager les autres in future encounters...
...Never mind that their own scientists have found these foods to be perfectly safe, and that E.U...
...and the enlistment of more than 30 countries in the "coalition of the willing" that has rallied behind President Bush and American policy...
...In the end, deviating from a free trade agenda may be a small price to pay if it gains us a reputation for rewarding our friends and being unkind to those who don't support us...
...with the Security Council galleries applauding the French and the Europeans treating their onetime hero, Colin Powell, as a serial dissembler, is simply a plus for Jacques Chirac and Gerhard Schroder...
...Scary stuff to the average consumer...
...True, by making it more difficult for some countries to sell their exports to us we impose costs on ourselves—in effect, a consumption tax...
...Sure, we need Mexican workers to do the jobs that Americans won't do —at prevailing wage rates...
...It permits the international specialization of labor that allows each nation to do what it does best, lowering the cost of traded goods and services, enriching both buyers and sellers...
...No need to rehearse at length for readers of this magazine the advantages of free trade...
...a letter of support from Britain and seven other European countries...
...A few months ago, just after Schroder had managed to get himself reelected on the back of violently anti-American rhetoric, I was asked to give a talk to the German-British Chamber of Industry and Commerce in Birmingham, a successful manufacturing center north of London...
...Second, foreign suppliers live in dread of antagonizing their overseas customers...
...They subsidize Boeing's major competitor...
...But would it be unreasonable to insist on more detailed labeling of Evian and other French waters that we consume by the millions of gallons, including the sort of health warnings that are more and more in demand by discerning consumers...
...The list could go on...
...Which brings us to those other potential veto-wielders, China and Russia...
...Danish and British cheeses are fine substitutes for the odorous French varieties...
...So step one should be for members of Congress—I assume that this is considered too tawdry for high-level administration offi-cials—to encourage consumers to show French and German companies that they will not be unharmed by their governments' attempts to distance themselves from America, to paint our president as a reckless cowboy (like Hitler, according to one former member of the Schroder team), and to claim that America is a greater threat to world security than Iraq...
...Now we certainly don't want to do anything to harm farmers in E.U...
...But man does not live by GDP alone: We have other important policy objectives...
...To coddle their inefficient farmers, these countries and their European Union allies have banned the importation of genetically modified foods...
Vol. 8 • March 2003 • No. 24
