WaPo Blowing the Whistle (a 2nd wal-mart related post today?)

In Culture of Corruption, Economic Justice, International Trade, Laws & Regulation on September 21, 2006 at 12:01 am

The Washington Post ran an article today, exposing the activities of corporations that get tariffs removed on foreign imports by drafting legislation and lobbying. This wouldn’t be so bad if the American taxpayers weren’t picking up the costs….

Each legislative season, corporate executives and lobbyists quietly draft hundreds of bills to suspend tariffs. Over time, the changes cost taxpayers hundreds of millions of dollars in lost revenue, a Washington Post analysis of U.S. trade data found…

The bills in Congress generally give no hint of whom the suspensions have been designed to benefit and sometimes refer to the products only by strings of numbers linked to phone-book-size tariff tables. But many corporate names can be found in reports on the legislation produced for Congress by the U.S. International Trade Commission.

Lawmakers usually introduce the provisions at the behest of companies in their districts. Many of those companies and their executives have given federal campaign contributions totaling millions of dollars.

Part of the argument by supporters of the legislation is that by removing tariffs they are reducing prices for consumers and creating jobs by cutting costs for U.S. manufacturers. But guess what?

The practice of not naming companies in the legislation obscures a fact revealed by The Post’s analysis: The biggest beneficiaries of the rising tide of tariff-suspension bills are domestic subsidiaries of foreign corporations. Of the 10 companies that stand to benefit from the greatest number of bills examined in the study, eight are owned by or affiliated with German and Swiss chemical companies. (Graphic of companies)

So essentially, American taxpayerrs are paying big tax money for foreign companies to make even more profits (And our Representatives are being paid big campaign money for this to happen)
The Post also mentions that these bills have gone unnoticed for the most part, despite growing criticism for “pork barrell spending and earmarks.” But it’s not like it’s a small number of bills, it’s very large:

Since the beginning of last year, legislators have introduced more than 1,400 bills seeking new or renewed tariff waivers or reductions.

To put that in terms of your pockets:

Budget analysts estimate that the grab bag of tariff suspensions passed by the House in March, if approved by the Senate and signed into law, would cost taxpayers $278 million…

Under guidelines set by Congress, each tariff suspension is supposed to cost taxpayers no more than $500,000 a year. Many proposals above the limit are rejected; others win approval anyway.

Another part of the problem is that this legislation often goes unnoticed by small American companies, which allows bigger companies, foreign or otherwise, to have lower prices on their imported goods than the prices of goods produced by the smaller companies. For example:

Dungey, who co-owns Auburn Leathercrafters in Upstate New York, launched a one-woman campaign against four bills that would cut the 2.4 percent tariff on imported dog collars and leashes. She argued that anyone familiar with the industry would realize domestic producers would find the waivers “devastating.”

She said she believes that Wal-Mart and other big importers count on U.S.-based manufacturers never learning about the obscure legislation. “A lot of people just don’t have the time to devote to staying on top of it,” Dungey said.

Some of the companies listed as receiving major benefits from these bills are Wal-Mart, Bayer (a German company), Spalding, Payless Shoes, and many foreign chemical companies. Of the American companies on this list, many are affiliates of foreign companies and sell foreign produced goods.

Finally, this legislation is being passed by both Republican and Democrat Reps. from all over the country. The article mentions a number of them by name.


For anyone interested, Washington Post also has a great resource for researching Congressional votes on bills, dating back to 1991


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