The battle over trade policy: it keeps going and going and going…..

In the wake of the WTO’s ruling against the U.S. on steel tariffs, there are signs that the Bush administration might try to formally accede to the WTO while maintaining high levels of import protection. According to the Financial Times:

The US is considering a radical change to its laws on unfair trade that would severely penalise importers even if Washington bows to the World Trade Organisation’s demands that it remove tariffs on foreign steel. The complex methodological change would sharply raise the duties on steel imports that are also subject to separate anti-dumping tariffs. The Commerce department, under pressure from the steel industry as well as lumber producers – who would also benefit significantly – gave notice in September that it is considering the change.

Alas, this is entirely consistent with my prediction of “hypocritical liberalization.” This move would nevertheless increase the likelihood of triggering a trade war with the European Union. [C’mon, isn’t that an exaggeration? The New York Times thinks everything Bush does will trigger a transatlantic row! OK, here’s some more tangible evidence.] In other depressing trade news, interest group pressure is mounting to renege on the planned end of Multi-Fibre Agreement on January 1, 2005. The Cato Institute’s Dan Ikenson has more:

[T]he U.S. textile lobby has launched a rearguard campaign to preserve and expand import barriers. Recently, a coalition of textile producers filed petitions seeking new restrictions on certain Chinese exports. Talk of filing new trade remedy cases has become more pronounced. And the specter of job losses in the U.S. textile industry is once again being used to vilify trade. The reality, however, is that American textile workers have had decades to adjust their expectations and seek new skills. Textile communities, and their leaders, have had ample opportunity to prepare for transition to employment in new industries. Meanwhile, the enormous costs of textile protectionism have been borne disproportionately by America’s lower-income families, who spend a higher proportion of their earnings on clothing. Textile protectionism has also deprived poor countries of export opportunities-precisely the kind of opportunities the Bush administration identifies as vital for promoting economic stability and security. Considering its burgeoning propensity to use trade policy to advance foreign policy and national security objectives, the administration should clearly articulate its support for freer trade in textiles and apparel by denying the industry’s rearguard efforts.

Will the administration do so? For my money — and the New York Times — it’s a coin flip. The depressing fact — that’s still better than any of the Democratic candidates for president. UPDATE: Drezner gets results from Andrew Sullivan! He posts:

Not even the White House can defend this attack on free trade in anything but the crudest political terms. The EU and the WTO are absolutely right to demand a reversal. If Bush sticks to his protectionist guns, he really should be pummeled by real economic conservatives.

Indeed. ANOTHER UPDATE: For a nice background primer on the steel case, you could do far worse than the Institute for International Economics site. Here’s a link to the latest backgrounder.