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The Busy Little Bees


Washington -- Comes now the "problem" of "market disruption" in the domestic honey industry. The government says the disruptors are Chinese honey exporters.

Of course the real cause of the disruption, were there any disruption, would be American consumers consuming a disruptive amount of the products of Chinese bees.

Market disruption occurs when a new or improved or more competitively priced product comes to market. The automobile disrupted the market for buggy whips, Japanese cars disrupted the U.S. auto market, the ballpoint pen disrupted the pencil market, McDonald's disrupted the hamburger market, and so it goes. Market disruption is generally the ferment of progress. The government is against it, which is why the government may restrict imports of Chinese honey.

China is not accused of "dumping" honey -- of selling it here for less than it costs to produce, or for less than honey sells for in China. The complaint of U.S. beekeepers is simply that China's honey sells well. It does, for reasons of quality as well as price.

The trouble for would-be protectionists is that there is no trouble. The U.S. honey industry is doing nicely -- productivity and prices are up, inventories are down. The secretary of agriculture says: "Because of the strong demand for honey, the increased [Chinese] imports have been absorbed by our market without adversely affecting sales of domestically produced honey."

Chinese honey primarily displaces other imports, not domestic production. Most Chinese honey goes to industrial users -- bakers, cereal makers, etc. Most domestic honey goes to the retail market. Chinese honey is sometimes blended with U.S. honey that otherwise would be unmarketable. U.S. beekeepers say that but for Chinese honey, prices would rise and so would U.S. production. Perhaps, but it is foolish to deliberately raise prices for 250 million American consumers in order to increase the share of the American market for a few thousand producers of a food product.

Nevertheless, a Cold War provision of trade law authorizes protectionist responses to "market disruption" caused by rapid increases in imports from any "non-market" economy if the imports produce "material injury, or threat thereof" to a domestic industry. The International Trade Commission, incited by U.S. beekeepers, has intuited a "threat" and recommended various pre-emptive tariffs.

Actually, regarding honey, liberalization of China's "non-market" economy is ahead of America's: China has completely deregulated honey prices in China and has ended honey export subsidies. U.S. honey subsidies, adopted during World War II when honey was valued as a sugar substitute and beeswax was used for waterproofing, are scheduled to end this October, but Congress' promise to end those should not be believed until it is fulfilled.

One reason imports are needed is that under the honey program U.S. beekeepers often make bigger profits by forfeiting their honey to the government -- for storage at taxpayers' expense in warehouses -- than by sending the honey to market. The honey program has been described by an Agriculture Department analyst as "the most absurd program we administer," and candidate Clinton, looking for one non-defense program he could oppose without wincing, picked the honey program.

Last September Congress promised that the program would die. Beekeepers promptly sought International Trade Commission action against China's non-existent but supposedly threatening "market disruption." They were hoping to get the government to give with one hand what it was taking away with the other. They said as much. The president of the American Beekeepers Federation said: "If we can get some reasonable trade sanctions against China, the reduction in the price-support programs will have no effect."

"Support people, not industries," President Clinton said to Boris Yeltsin in Moscow last month. If, for a change, the president practices what he preaches, he will ignore the ITC's honey-protection proposals. But it is instructive that the government's normal churning produces such proposals.

Protectionist actions against $50 million worth of Chinese honey per year could jeopardize billions worth of U.S. agricultural exports to China. Many U.S. honey packers could be injured, even bankrupted by tariffs that increase the price of honey they are contractually obligated to deliver to customers at fixed prices. And the mere prospect of higher tariffs already has caused some industrial users of domestic as well as imported honey to shift to cheaper sweeteners.

All this because the incorrigible government, with its itch to intervene incontinently here, there and everywhere, cannot keep its sticky fingers off honey.

George F. Will is a syndicated columnist.

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