Shrimp Joins Steel as a Sino-U.S. Irritant

One week after the U.S. gets all steamed about the revocation of Pfizer’s Viagra patent in China, sending China’s critics into a media tizzy, the United States government masterfully demonstrates its possession of the free-trade moral high ground by slapping 100% duties on Chinese shrimp, then turning around and passing that money directly to American shrimpin’ boat captains (thanks to the Byrd Amendment, which the U.S. has been ordered by the WTO to revoke and which even Forbes excoriated on its passage) This largesse for America’s fishermen comes on top of state subsidies they receive. BusinessWeek suggests that this will raise the cost of shrimp to the American consumer by 44%.

Notwithstanding whatever case there may be to offset hardships felt by U.S. fisherman and China’s fairly mild initial reaction , the move is the latest in a series of rulings likely to complicate the job for U.S. trade negotiators seeking to protect a broad range of industries by opening the door for trade in China, and will likely raise the tit-for-tat battle for mutual market access with the PRC.

While the case for an industrial policy is still weak in the U.S. (given that to many Americans such an approach would reek of favoritism, which is ostensibly un-American,) the U.S. is going to have to begin making unpleasant choices. A world of free trade does not permit a nation to demand open access for some of its industries and protect others. Somewhere, somehow, something is going to have to give, whether it is textiles, cotton, steel — or shrimp — in the name of access for automobiles, aircraft, high-technology, and a host of other industries.

Interesting reading on this is Robert Lawrence‘s seminal debunking of the hollow-America myth in his 1984 work Can America Compete . I’m not normally a fan of Brookings Institute authors, but this little gem is a rare and worthy exception, and Lawrence (currently a senior faculty at the Center for Business and Government at Harvard’s Kennedy School) defies the liberal bents of his institutional affiliations as one of academe’s leading free trade advocates. He quite nearly makes a convincing case for an industrial policy, and this was at a time when there weren’t very many major U.S. industries to favor — in 1984, IT was a tiny fraction of its current size and Microsoft wasn’t even a public company.