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Sunday, August 26, 2012

Free People, Free Trade, Consumers, Cars, Countries and Dumping/Protectionism

When times get tough, countries often get protective of their domestic industries. Autos, for example.

Look at GM and the U.S. government's recent efforts to save the company both from itself and extinction.

Protectionist measures by government, however, are always harmful to consumers. Free trade is always helpful to consumers. It's just that simple.

If China wants to work for nothing and in essence donate its products and services to us, why not simply accept them and use our people's time and talents to produce other things of value? Consumers always benefit from better product offerings at lower prices, no matter where they originate.

France Accuses Hyundai of Dumping makes the point crystal clear:

"The French government accused Korean car makers Hyundai Motor Co. and Kia Motor Co. of dumping as their sales are rising, while local manufacturers see their market shares dwindling.

"The two brands Hyundai and Kia are competing with our manufacturers in unacceptable conditions of dumping," said Arnaud Montebourg, who leads the industry ministry and renamed it the ministry for "productive recovery."

The anti-dumping measures sought against Hyundai are part of the clauses of a trade agreement sealed between the European Union and South Korea, he said.

He didn't elaborate on the remarks, which came during an address to Socialist Party members in La Rochelle.

French car manufacturers Peugeot Citro├źn and Renault have suffered from the economic downturn in France, which led to falling sales in Western Europe. Over the past months, Peugeot announced cost-cutting plans that included the closure of assembly lines and massive layoffs.

The EU-South Korean free trade treaty was signed in July 2011 and took effect in May. Mr. Montebourg issued a statement this month saying that Korean car exports to the EU had jumped 50% in January and February compared with a year before. He said the increase was mainly in the segment of small, diesel-engined cars, a niche where French makers were traditionally strong.

He noted that the FTA provides for the EU to urgently look into any sudden rise in imports to one or several member states, of products belonging to a sensitive sector, such as cars. Mr. Montebourg wants the EU to look into the trade imbalance and to envisage "new action" if it turns out that there is a deep trade imbalance in France's disfavor.

According to the European automobile manufacturers' association ACEA, Hyundai and Kia together sold 391,511 cars in the European Union in the first half of this year, up 17% from the first six months of 2011. The two brands together increased their market share to 5.9% in the first half of this year, from 4.7% a year before.

Recent data from the CCFA industry group showed that sales of personal cars in France fell 14% in the first seven months of the year. Sales from Hyundai Group in France rose 30% from the same period a year ago, while sales of Peugeot and Renault fell 20% and 17% respectively."

Summing Up

Competition is tough. Most individuals, companies and countries don't make it to the "Big Leagues."

And free markets can be especially tough on mediocre or poor performers when a country is experiencing recessionary conditions within its borders. While a rising tide lifts all boats, a receding tide doesn't.

Consumers have it tough when recessions hit as well.

So if some of the French citizens want to spend their MOM on buying cars from Kia and Hyundai in increasing quantities, why shouldn't they be allowed to do just that? And if Kia and Hyundai want to offer better values to French consumers than Peugeot and Renault are offering, why shouldn't they be allowed to do just that?

Lots of Americans drive imported Toyotas and purchase Samsung TVs. And most of the clothes, other electronics and toys that we buy originate elsewhere, too. U.S. consumers are better off when allowed to make free choices in a free market.

So in that spirit of freedom and individual choice, why shouldn't U.S. based companies be allowed to drill for and sell as much oil and natural gas as possible and extract and sell as much coal as possible, too?

And why does a huge percentage of our corn crop have to be set aside for producing ethanol instead of letting the free market work to provide more corn to food and thereby lower food prices for consumers?

Why shouldn't parents be able to pick where their children attend schools, and why shouldn't individuals be allowed to provide for their own retirement and health care needs?

Why should the U.S. government make Solyndra and ethanol type investments by taxing  free individuals who would otherwise choose to spend their MOM differently?

And why should the U.S. government place high tariffs on things like sugar imports, thus raising prices for U.S. consumers?

We're the best example in the history of the world of a free market based and opportunity filled society where free individuals can through their entrepreneurial and innovating efforts try and  succeed or try and fail, as the case may be.

Consumers rule. Not the government.

So why don't we act that way instead of wanting to copy the failed and bankrupt European way? 

Such as the French and their sick socialistic economy and auto industry, for example.

Thanks. Bob.

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