Wednesday, March 9

Who Speaks for the Consumer?

In ADAM DAVIDSON's Manufacturing Lobbyists Make Their Cases on the Hill, he reports that larger companies typically want Congress to promote free trade as aggressively as possible, but smaller companies are much less enthusiastic. Penn United, one of the smaller companies, recently learned that one of his longest customers to the Chinese. DAVIDSON reports:
Penn United makes precision dies. In the US, a die costs between $40 and $100,000. Chinese companies make them for a fifth that much. So Purcell's customers keep telling him they're buying dies overseas....

Penn United has become a leading advocate within [the National Association of Manufacturers] for tougher enforcement of trade law and for a moratorium on all new free trade agreements. But it would be a mistake to assume that this is the position of all NAM members. Take Steve Lammers(ph), who runs Panasonic's picture tube factory in Ohio. The last thing he wants is stricter trade enforcement. Lammers' factory imports a great amount of specialty glass from Japan, the only country that makes the kind of glass he needs. Every year Panasonic pays $5 million in tariffs to the US government for that glass. Lammers says these tariffs restrict free trade and make it difficult to keep a factory and hundreds of jobs in the US, when he's competing with companies who have moved abroad, where labor is so much cheaper....

This split between large and small manufacturers, between free trade absolutists and those who worry that trade will do them in, has been brewing for years.
"Free trade absolutists"? That's a little harsh. Admittedly the report is about manfucturers, but all too often, no one speaks for the consumers. Why should consumers be forced to pay higher prices to prop up companies like Penn United?

No comments: