Principles and Policy: Will Bush Trip Over Pears?

by | Jul 14, 2002

Once the Bush administration abandoned the principles of free trade by imposing punitive tariffs on imported steel, it was only a matter of time before other industries sought government redress for their own failure to compete successfully. Case in point: Pears. Pears? Well, canned pears to be specific. The $100 million U.S. canned pear industry […]

Once the Bush administration abandoned the principles of free trade by imposing punitive tariffs on imported steel, it was only a matter of time before other industries sought government redress for their own failure to compete successfully. Case in point: Pears.

Pears? Well, canned pears to be specific. The $100 million U.S. canned pear industry is facing what they consider to be a mortal threat–imported pears from South Africa. Two years ago, Congress lifted the 15.6% levy on imported pears as part of a general program to promote trade with African nations. The effect has been to increase the South African “stranglehold” on the U.S. canned pear market to 2.7%, more than double the 1% they had when the tariff was in effect.

2.7% is clearly way too much market share for domestic pears to compensate for, or so their industry lobbyists claim. Essentially the industry is bitching over losing just over $1 million in annual sales to the South African pears, which are reportedly $3 to $5 less per carton than domestically grown pears.

The problem isn’t competition, but of declining market interest. Canned fruits of all kinds have lost overall market share in recent years as people are buying more fresh fruits and vegetables. But while demand is stagnant, U.S. labor and production costs continue to rise, and rather than deal with those issues first, American food producers are seeking to stop more efficient foreign competition from further eroding their dwindling market share.

Ultimately, while the fate of the canned pear industry won’t have much effect on the economies of the U.S. or South Africa, the political decision of the Bush administration on whether to re-impose the tariff will have major consequences. If the White House decides to abandon a free trade policy that they actively support–just last month, Treasury Secretary Paul O’Neill backed the African trade program while visiting the continent–then they’re sending the message that free trade is not a true principle of this administration and that any group who has even the slightest grievance will be coddled by the forces of Big Government, so that they won’t have to deal with the reality of actual competition in a free marketplace.

FEEL FREE TO SHARE
S. M. Oliva is president of Citizens for Voluntary Trade and a senior fellow at the Center for the Advancement of Capitalism.

Related articles

Voice of Capitalism

Our weekly email newsletter.