What should take precedence in decisions by international organizations: the pursuit of free trade around the world or the efforts to protect a vital industry? This question is central to the conflict that exists between the United States and several of her trading partners, which include: the European Community, Japan, Korea, China, Switzerland, Norway, Brazil, Chinese Taipei (Taiwan), Switzerland, Norway, Japan, Korea, Thailand, Canada, Mexico, Turkey, Venezuela, and New Zealand. The dispute is over President Bush’s decision to place increased tariffs on steel imports to the United States. A tariff is a tax on goods coming into the United States from other nations.

In the past five years, approximately 30 U.S. steel mills have gone bankrupt. The desired effect of this tariff is to protect U.S. producers and the jobs they provide against competition from foreign producers who, in many cases, can make the product at a cheaper cost. Bush’s decision resulted in immediate complaints registered with the World Trade Organization (WTO) by several steel producing nations.

While the decision will protect many U.S. firms and the workers who are employed by them, it will also drive up the cost of steel for U.S. companies. This could potentially lead to increased prices for such items as automobiles, construction equipment, and manufacturing machinery. These price increases would affect the U.S. consumer. Bush’s decision, therefore, could mean more out-of-pocket costs for American families. However, if Bush failed to protect the U.S. steel industry, he could be accused of insensitivity to steelworkers and their families.

Questions to Consider:

* What is a more important issue today: pursuing free trade or protecting American industries such as steel?

* Who should have the power to decide situations such as this? Should U.S. law (and that of other countries in similar cases) be superseded by the decisions of international organizations such as the WTO?

Your Decision:

If the WTO rules against Bush's steel tariffs, what would you recommend to the president?

News Links Referenced in this Activity

http://www.usatoday.com/money/covers/2002-03-06-steel.htm

http://www.wto.org/english/news_e/news02_e/dsb_08july02_e.htm

1		Defy the WTO ruling.
			A)	Agree
			B)	Disagree
			C)	Don't know
2		Comply with the WTO ruling.
			A)	Agree
			B)	Disagree
			C)	Don't know
3		Defy the WTO and open new negotiations on balancing economic nationalism with free trade.
			A)	Agree
			B)	Disagree
			C)	Don't know