Friday, August 18, 2006

The Best Example of Free Trade?

Bush touts "free trade" as the reason Harley-Davidson is doing so well. Actually, it was the protectionism that allowed Harley to flourish amidst heavy Japanese competition:

From "Economist's View"

... Let's play dress-up! -- but we need an excuse. How about we say it's to tout the merits of free trade? Yeah, that's the ticket:

Free-Trade Ain't What It Used to Be, by Dean Baker: USA Today had a great story about President Bush's visit to a Harley-Davidson factor in York, Pennsylvania to tout the merits of "free-trade." The reason why the story was so great is that the plant is in fact a testament to the effective use of protectionist policies to sustain a favored industry.

Don't take my word for it, here's the beginning of a 1983 article in the New York Times describing President Reagan's decision to impose tariffs on imported motorcycles:

In an unusually strong protectionist action, President Reagan today ordered a tenfold increase in tariffs for imported heavyweight motorcycles.

The impact of Mr. Reagan's action, which followed the unanimous recommendation of his trade advisers, is effectively limited to Japanese manufacturers, which dominate every sector of the American motorcycle market.
The action was exceptional for protecting a single American company, the Harley-Davidson Motor Company of Milwaukee, the sole surviving American maker of motorcycles ("U.S. Raises Tariff for Motorcycles," 4-2-83:A1).

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