Mike Johanns (R-NE), the good senator from Nebraska, has it right. He’s done a wonderful job of using the Toyota crisis as a link to Japan’s unfair trade practices regarding U.S. beef.
Johanns has made the point on numerous occasions that Japan’s intransigence on a full reopening of its market to U.S. beef is similar to the U.S. enacting a ban on the sale of Toyota cars and Japanese auto parts in the U.S. until Japan could prove there were no defects or ensure there would not be any problems. Johanns has also pointed out that the Toyota car defects have already cost numerous lives, while there’s been absolutely no risk to Japanese consumers from BSE.
The only problem I can see with Johanns’ approach is that he is being reasonable. He’s not advocating treating Japan’s auto industry as Japan has our cattle industry; he’s simply pointing out the fallacy of Japan’s position. He illustrates that if the U.S. were to treat Japan as it has treated the U.S., Japanese autos would be banned from the U.S. market for a decade with financially devastating effects; it would also be unethical.
I’m a little more radical than Johanns. My question is “when is enough, enough?” I actually see value in doing just what Johann isn’t advocating; that is, to ban Japanese parts and cars until they bring their requirements in line with recognized science and with accepted trade protocols.
My mom always told us boys when we were fighting that two wrongs don’t make a right. I understand that logic. However, if one side consistently defies the rules, then the other side either has to insist they be followed or pick up their marbles and look for another game.
I understand that with our out-of-control deficit spending, we no longer have the ability to play hardball with the Asian countries on whom we rely to buy our debt. We certainly can no longer say that China and Japan need us more than we need them. Plus, Japan has a significant auto-making presence here in the U.S. I also understand that in the big picture of things beef trade is a rather minor issue. However, unless we raise the stakes, it’s already been proven that we will just have to live with restricted access.
The trouble is that the U.S. has already signaled that there are no consequences for breaking the rules. Meanwhile, Japan has made it clear that internal political pressures have more sway on their policies than the need to be a moral and ethical trading partner.
I guess when one considers the harm created by the loss of market access as a result of BSE, and you combine that with the subsidies given to ethanol that radically changed our cost structure, we should be celebrating that we have liquidated the cowherd in only what will be 13 of the last 15 years. Despite it all, we’re now in a position where most of the pundits are predicting a fairly profitable next 3-5 years. Unfortunately, the political will to support the beef industry will wane even more as profitability returns, and few will consider the billions of equity lost and the downsizing of the industry to get there.