Wednesday, October 26, 2011

Gaddafi, Khaled Mattawa, and the Bacchae

I suppose the Western media caravan has moved on, and there isn’t going to be a lot of interest in the latest footage of Muamar Qaddafi’s capture obtained by Global Post.

Basically, Qaddafi is brutalized for four minutes by a frantic mob. One triumphalist tries to stick something up his rear end. Everybody yells and shoots in the air as they stomp and pummel the terrified, blood-covered ex-supremo.

Then Qaddafi is bundled off to be shot in the head, killed in a crossfire, suffer a fatal slip in the shower, or whatever fate the embarrassed kibitzers of the NTC decide to cobble together to explain the subsequent appearance of his corpse in a meat locker in Misrata.
The video makes for rather depressing viewing for students of human nature, and also offers a sobering harbinger of things to come in the new Libya.

If I were in Syria, I would find these images dispiriting rather than energizing.

Poet Khaled Mattawa, however, looked at the same tape and had what could be termed a “wargasm”.

He is obviously heir to the ecstatic Dionysian strain of poesy, rather than the detached Apollonian ideal.

The LA Times published his poem After 42 years on its op-ed page. It’s pretty much everywhere now.

What and who taught you O sons of my country to be so fearless cruel?
Him, they say, for 42 years, 42 years of him.

Their shrill Allahu Akbars exclamations of astonishment—
What have I done O Lord to deserve the honor of capturing the rat?

If the brutal frenzy is embarrassing, well, blame it on Qaddafi:

Perhaps he was a magnet and he drew evil out of men’s chests,
His hands, his hands saying wait, wait
Reached into their lungs and wound and knotted their raw souls,
A magnet now siphoning cruelty to itself.

Let’s give the older generation a glorious share in the slaughter; in fact, why not ritually wet the hands of the whole country in Qaddafi’s blood, at least vicariously (though I noticed no grateful shoutout to the folks at NATO who made it all possible):

To tear him to bits, my mother’s friend once said.
To tear him to bits, six million hearts had prayed –
O God grant me the sight of him dead!

Heck, let’s just leave humanity out of it:

The rabid beast, captured, kicked about and shot in the head.

Obviously Mattawa really, really hates Qaddafi.

He’s from Benghazi, although his parents sent him to the US during his teens, where he has resided ever since. He is a distinguished poet with a raft of awards and grants, presumably for work better than the stuff quoted above.

Mattawa came out against Qaddafi in February 2011; his family was active in the Benghazi rebellion.

If not for the attention-hogging grandstanding of Bernard Henri-Levy, Mattawa might have the face of the Libyan revolution in the Western media. Now I suppose he must content himself with playing the role of the Kipling of the R2P movement.

Mattawa, who claims Misrata as his ancestral home, doesn’t seem to be above manufacturing outrage for effect.

When one reads After 42 Years, one is invited to assume that Gaddafi’s regime killed his father and brother (certainly the impression you get when Mattawa read this dramatic excerpt on PRI’s The World on October 26):

I was five when the dictator took my brother away

…five years old when my father was killed

standing in front of a hotel.

Matter of fact, as an interview/profile with Mother Jones reported in February 2010, Mattawa and his only brother, Ibrahim, were sent to the United States in their teens, where they have resided ever since.

As for his father, a 2009 profile in the Kalamazoo Gazette ended:

When Mattawa moved from his country in 1979, it was "to wait out Gaddafi." Things have mellowed there lately, and Mattawa, now married to a woman from Libya and the father of a child, returns once a summer to see his parents.

"It's sort of normal, in a weird sense," he said.

As Mattawa has frequently recounted in interviews, one of his dominant memories was not of his father’s demise; it was the humiliation of his terrified father driving around with his car plastered with a poster of Gaddafi that he dared not remove.

Normal, in a weird sense, to imply that one’s father, unmanned by Gaddafi's regime, was “killed standing in front of a hotel.”

Psychoanalysts, start your engines.

To me, the interesting element of Mattawa’s resume is his current employment: University of Michigan at Ann Arbor, the same place that Juan Cole works.

I would not be surprised that the desire to keep up with Mattawa had something to do with Cole’s over-the-top cheerleading for the “Free Libya” forces.

You don’t want to be getting the stinkeye from Khaled Mattawa in the faculty lounge for going easy on the rabid beast on Charlie Rose the night before.

For those not yet surfeited with patriotic gore and interested in literature that mixes compassion with its passion, here’s a passage from Euripedes’ The Bacchae (interestingly, Libya was one candidate for the homeland of Dionysus), in the Gilbert Murray translation.

Here the Bacchae, with an assist from NATO—I mean Dionysus--discover Pentheus, son of the high priestess Agave, spying on the proceedings from a treetop.

…scarce was he beheld upon his lofty throne, when the stranger disappeared, while from the sky there came a voice, 'twould seem, by Dionysus uttered-

"Maidens, I bring the man who tried to mock you and me and my mystic rites; take vengeance on him."

"Hither” cried Agave; "stand we round
And grip the stem, my Wild Ones, till we take
This climbing cat-o'-the-mount ! He shall not make
A tale of God's high dances! " Out then shone
Arm upon arm, past count, and closed upon
The pine, and gripped; and the ground gave, and down
It reeled. And that high sitter from the crown
Of the green pine-top, with a shrieking cry
Fell, as his mind grew clear, and there hard by
Was horror visible. It was his mother stood
O'er him, first priestess of those rites of blood.
He tore the coif, and from his head away
Flung it, that she might know him, and not slay
To her own misery. He touched the wild
Cheek, crying: "Mother, it is I, thy child,
Thy Pentheus, born thee in Echton's hall!
Have mercy, Mother ! Let it not befall
Through sin of mine, that thou shouldst slay thy son! "

But she, with lips a-foam and eyes that run
Like leaping fire, with thoughts that ne'er should be
On earth, possessed by Bacchus utterly,
Stays not nor hears. Round his left arm she put
Both hands, set hard against his side her foot,
Drew , . . and the shoulder severed ! Not by might
Of arm, but easily, as the God made light
Her hand's essay. And at the other side
Was Ino rending ; and the torn flesh cried,
And on Autonoe pressed, and all the crowd
Of ravening arms. Yea, all the air was loud
With groans that faded into sobbing breath,
Dim shrieks, and joy, and triumph-cries of death.

And here was borne a severed arm, and there
A hunter's booted foot ; white bones lay bare
With rending ; and swift hands ensanguined
Tossed as in sport the flesh of Pentheus dead.

And, ah, the head of all the rest,
His mother hath it, pierced upon a wand,
As one might pierce a lion's, and through the land,
Leaving her sisters in their dancing place,
Bears it on high ! Yea, to these walls her face
Was set, exulting in her deed of blood,
Calling upon her Bacchus, her God,
Her Comrade, Fellow-Render of the Prey,
Her All-Victorious, to whom this day
She bears in triumph ... her own broken heart.

Brutal times demand better--not more brutal--poets.

Monday, October 17, 2011

Syrian Bloodshed and the West's Abdication of Journalistic Responsibility

The October 13 BBC headline read: Clashes in Syria leave 19 dead – rights activists.

That gives the impression that the brutal Syrian army killed 19 Syrian demonstrators.

Not quite.  The story continues:

The UK-based Syrian Observatory for Human Rights said 10 people died when government troops attacked the northern town of Banash.

In the southern town of Haara, armed men killed at least nine soldiers. 

That’s nine Syrian government soldiers.  According to Syrian government reports, 1100 Syrian government forces have been killed since the uprising began.

Anti-government violence by armed groups is one of the inconvenient truths about the Syrian uprising.

Democracy activists don’t want to admit it; sympathetic media outlets don’t want to report it.

Now that the issue is becoming unavoidable, the new tactic is to excuse it as the response of incensed deserters, while deploring the “slide toward civil war.”

Not so.

The issue of “armed gangs” has been there from the beginning.

It took a willful abdication of journalistic responsibility to suppress it—and to continue to misrepresent it in order to evade responsibility for the simple-minded (and single-minded) pro-democracy media cheerleading  that characterized most reporting on Syria.

Now that the non-violent anti-government  protests are sputtering into futility, center stage is taken by the advocates of violent struggle.

For the West and Sunni states to breathe more life into the anti-Assad movement, violence has to be portrayed as inevitable, principled response, not escalating provocation seeking to obscure the failure of a political movement.

I expect the media to cover the issue of anti-government violence with same dishonest, guilty evasiveness it has displayed in the past.

Here’s a piece I wrote in April 2011 about one of the first incidents—an attack on a government convoy near Banyas that killed almost a dozen soldiers, confirmed by a source that I consider impeccable: the family of Josh Landis, the Syria watcher at University of Oklahoma.

It also describes the state of play around a key anti-Assad figure: Abdul Halim Khaddam.

Tuesday, April 12, 2011
Does Abdul Halim Khaddam Have Anything to Do with What's Going on in Syria?
Is Saudi Arabia Showing George W. Bush How to Run the Regime-Change Table in the Middle East?

Saudi Arabia has engaged in some extremely public and forceful pushback against Middle East unrest in general and Iran in particular.  In some quarters, it’s being called the Saudi counter-revolution.

Is the pro-Iran/pro-Hezbollah Assad government in Syria the next Shi'a domino?

Iran’s Press TV certainly thinks so.

In an op-ed entitled Saudi Arabia, Jordan Behind Syria Unrest, the authors write:

Saudi Arabia, which often bows to US and Israel's policies in the region, tried to destabilize Bashar al-Assad's government by undermining his rule.

To this end, Saudi Arabia paid 30 million dollars to former vice president Abdul Halim Khaddam to quit Assad's government.

Khaddam sought asylum in France in 2005 with the aid of Saudi Arabia and began to plot against the Syrian government with the exiled leaders of the Muslim Brotherhood.

Khaddam, who is a relative of Saudi King Abdullah and former Lebanese premier Rafiq Hariri, used his great wealth to form a political group with the aim of toppling Bashar al-Assad.

The triangle of Khaddam-Abdullah-Hariri is well-known in the region as their wives are sisters.

Khaddam's entire family enjoys Saudi citizenship and the value investment by his sons, Jamal and Jihad, in Saudi Arabia is estimated at more than USD 3 billion.

Therefore, with the start of popular protests in Tunisia, Egypt, Libya, Yemen and Bahrain, the Saudi regime saw an opportunity to drive a wedge between Tehran, Damascus and Beirut axis.

Due to the direct influence of the Saudi Wahhabis on Syria's Muslim Brotherhood, the people of the cities of Daraa and Homs, following Saudi incitement and using popular demands as an excuse began resorting to violence.

It is reported that the United States, Israel, Jordan and Saudi Arabia formed joint operational headquarters in the Saudi Embassy in Belgium to direct the riots in southern Syria. Abdul Halim Khaddam, who held the highest political, executive and information posts in the Syrian government for more than 30 years, is said to have been transferred from Paris to Belgium to direct the unrest.

The reason for this was that based on French law, political asylum seekers cannot work against their countries of origin in France and therefore Khaddam was transferred to Brussels to guide the riots.

Jordan equipped the Muslim Brotherhood in the two cities with logistical facilities and personal weapons.

Although, Bashar al-Assad promised implementation of fundamental changes and reforms after the bloody riot in the country, the Brotherhood followed continued to incite protesters against him.

The Syrian state television recently broadcast footage of armed activity in the border city of Daraa by a guerilla group, which opened fire on the people and government forces. It is said that the group, which is affiliated to Salafi movements, obtained its weapons from Jordan and Saudi Arabia.

Because Syria's ruling party is from the Alevi tribes associated with the Shias, the Brotherhood, due to its anti-Shia ideas, has tried for three decades to topple the Alevi establishment of the country.

Hence, the recent riots in Syria are not just rooted in popular demands and harbor a tribal aspect and Saudi Arabia, Jordan and the US are directing the unrest for their future purposes.

Press TV aside, Abdul Halim Khaddam--who used to be Hafez al-Assad's right hand man/fixer before coming up short in the succession struggle--is insisting he’s just letting human nature and pent-up demands for freedom drive events in Syria without any help from him. 

In this recent picture, Khaddam looks quite comfortable in his plush Parisian digs, purportedly purchased through the generosity of his brother-in-law, King Abdullah of Saudi Arabia and/or acquired as the result of his own billionaire-level business acumen, so maybe he’s just kicking back and letting politics take its course inside Syria.

Of course, in his own words he’s “working around the clock to set an executable plan to achieve [his] targets”, but we’re led to believe that relates to the political struggle after popular unrest has kicked the props out from under the Assad regime.

He’s also willing to foment anti-Iranian and anti-Shi’a sentiment, something that would please his alleged patrons in Riyadh.

In 2006, Khaddam told had this exchange with an interviewer:

Q: What are you current priorities? Do you want to reform the regime, reform it, or topple it?

A: This regime cannot be reformed so there is nothing left but to oust it.

Q: But how will you oust it?

A: The Syrian people will topple the regime. There is a rapidly growing current in the country. Opposition is growing fast. I do not want to oust the regime by military coup. A coup is the most dangerous type of reform. I am working to create the right atmosphere for the Syrian people to topple the regime.

In another interview in 2006—the year he optimistically expected the Assad regime to fall-- Khaddam elaborated on the theme:

Gulf News: On January 14, you announced you would form a government-in-exile that would take over power when the government of President Bashar Al Assad collapsed, but nothing has happened since then. I have contacted opposition forces in London and Washington who welcomed your move but said they have not heard from you. What happened to the government-in-exile idea and are you going to cooperate with the existing opposition forces or form a government of your own supporters?

Abdul Halim Khaddam: I am working with different opposition forces which exist inside Syria and in exile. We are discussing the formation of a government-in-exile. Its main task will be to fill the power vacuum in the country and be in action after the collapse of the regime in Damascus.

I am discussing my proposal directly with the leaders of opposition factions or through mediators. We are looking to foster and strengthen cooperation among different opposition factions, including Muslim Brotherhood, which are banned by law in Syria since 1980. We will announce a programme for a democratic change in Syria that will include all the topics and the issues to be handled by the opposition in the next stage.

We are working round-the-clock to set an executable plan to achieve our targets and to benefit from the blunders committed by the regime in recent years. The regime has handcuffed itself through a chain of fatal mistakes which will help the opposition overthrow the totalitarian regime and launch a democratic era.

Khaddam also beat the anti-Iran and anti-Shi’a drum in 2007—a worrisome combination for Assad, who as a member of a small Shi’a-esque minority sect, the Alawites, reigns over a Sunni majority (an interesting inversion of the situation in Bahrain--Sunni sheiks lording it over disgruntled Shi'a majority):

Khaddam speculated that Assad's regime was being infiltrated by Iran's elite Islamic Revolutionary Guard Corps with Iranian intelligence agents having penetrated the Syrian political and security circles. He pointed to an agreement between Syrian and Iranian security organs, a mutual defence agreement signed in 2006 between Tehran and Damascus and a "broad co-ordination between the security organs in the two countries which covers Lebanon and Syria".

Khaddam accused the Iranian ambassador to Damascus of leading the Shi'itisation process in Syria, saying: "Shi'itisation is a political phenomenon carried out by the Iranian ambassador to Damascus with the objective of creating a political situation that is tied to Iran, and this activity is dangerous as it lays the ground for sectarian strife in Syria".

At the very least, Khaddam showed more message discipline that an organization called the Reform Party of Syria.  The only conspicuous achievement of the group mentioned on its Wikipedia page was an endorsement of Nicolas Sarkozy for President (of France).

The RPS, although referred to by the World Tribune (itself the perhaps less than authoritative mouthpiece of the politically-wired Soka Gakkai cult in Japan) as "authoritative", appears to have jumped the shark with its recent backgrounder.  It stated:

Iran has deployed its Islamic Revolutionary Guard Corps in Syria to bolster Syria's defense. The Washington-based opposition group said the IRGC contingent in Syria includes 10,000 troops, with headquarters in the northern province of Homs. 

"In essence, the IRGC now occupies Syria and has become its de facto ruler," RPS spokesman Farid Ghadry said. "Syria has become the 32nd province of Iran." 

Leaving levity aside, the references to Abdul Halim Khaddam caught my eye because of a sad, sober post by Josh Landis, one of America’s premier Syria-watchers, on his blog, Syria Comment:

The Syrian revolution struck home yesterday. My wife, Manar Qash`ur [Kachour], burst into tears last night as she read the Facebook page that has kept her updated on events in her hometown, Latakia. Lt. Colonel Yasir Qash`ur, who was Manar’s cousin and 40 years old, was shot in Banyas on Sunday. He was one of two Lt. Colonels and 10 military personnel killed – more were wounded. Yasir’s funeral was held in the village this morning – Monday. My brother-in-law, Firas, and father-in-law, Shaaban, both attended.


My father-in-law said on the phone this morning that it seemed that supporters of ex-Vice President Khaddam, who was from Banyas, were behind the attack. It is said that they had set a trap for the military unit. All this is speculation, however. We know precious little about who is killing whom in Syria. Allegations are numerous. Real knowledge is scarce.

There is a widespread enthusiasm for acknowledging the popular character of the demonstrations against Assad.

There is intense unease about exploring the role of armed provocateurs in trying to foment more extreme anti-government unrest.

Al Jazeera—which appears an enthusiastic cheerleader for the Syrian protests, even as it seems to show a willingness to hew to the Saudi line in downplaying reporting on the anti-Shi'a crackdown in Bahrain—did run a video segment on Inside Story Syria: Conspiracies and Condemnation.

Judging from the version on Youtube, it was originally called Conspiracy over Syria Protests; perhaps that title was considered to give excessive credence to the government’s claims.

To an almost ludicrous extent, the moderator, Nick Clark, tried to get his three panelists to comment on video footage aired on Syrian state TV that showed a white Honda riding down a street in some Syrian town with guys firing automatic weapons out the window.

The panelists admitted in passing that it was plausible that gunmen had joined the anti-government protests.

Nobody was willing to discuss the implications, preferring to treat the footage of gunmen—true or not—as simply an attempt by the government to misdirect attention away from the genuine protests.  The panelists critiqued the lack of evidentiary meat on the reportorial bones, and used their lack of interest in the clip to emphasize that the Syrian state media—and by implication, the government—had lost credibility.

That white car, with “a chap hanging out firing a machine gun”, as Clark put traction.

The possibility that the gunmen were pro-government irregulars has subsequently been floated in the media courtesy of pro-demonstrator spokespeople.

A similar vow of omerta seems to apply to the ambush of the Syrian Army patrol that killed Josh Landis's in-law. 

One would think the death of nearly a dozen soldiers in an ambush would be considered a remarkable development, considering that the death of equivalent numbers of demonstrators is a world media event. 

It’s also rather shocking that, in an acknowledged authoritarian state like Syria, somebody could come up with the wherewithal to mount a successful attack on a rather sizable military patrol.

But even in news for Banyas, the reports of an ambush are virtually a non-story, as the media concentrates on the crackdown instead.

On Josh Landis’ site, a pro-demonstrator commenter advanced the story that one member of the unit had killed the rest of the soldiers in a fit of patriotism, rather than fire on demonstrators.

If reports in Syrian media are truthful, this would have been a remarkable display of determination and marksmanship.  In addition to nine dead, twenty three were wounded.  Admittedly, Nidal Malik Hasan killed and wounded more at Fort Hood, but those victims were on base and unarmed; the Syrian soldiers were on patrol and presumably within reach of their weapons.

The pro-democracy slaughter line seems less likely than the story of one of the survivors:

Mazin Fittimi reported that he was sitting in the front part of the convey when armed men ambushed and rained them with bullets and grenades from nearby buildings and water sewage canals at 'Al-Qwz Bridage'.

In the Arab press, Khaddam asserted that his home town of Banyas had a long history of repression, persecution, discrimination and marginalization and “don’t need anyone to guide them”.

We’ll see.

Whether or not Khaddam is Saudi Arabia’s Chalabi for Syria doesn’t get a lot of airing in the regional press. 

Whether or not he has assets in his home town that would mount an attack on a government convoy is apparently not a matter of widespread interest.

And that doesn’t even go into the matter of Rifaat Assad, Hafez Assad’s brother—and Bashar Assad’s uncle—who tried to take over in a coup and was exiled to France.  Rifaat is also married to one of King Abdullah’s sisters.

So that means that the former Number 2 and Number 3 in the Syrian regime are both eager to see Bashar fall on his behind; and both are close to Saudi Arabia, which now appears to be, more than ever, willing to take positive action to sideline its enemies.

Of course, the Assad regime, as the al Jazeera panel pointed out, has been counterproductively coy and vague about the conspirators it claims are dead-set on undermining the government.

Is the Syrian government just blowing smoke?  Trying to build a persuasive case before they name names?  Afraid to provoke an open breach with the Saudi and Jordanian governments by publicly accusing Khaddam and Rifaat Assad?

Is Syria trying to get the word out indirectly through the willing, eager, but less than respectable outlet of Iran and Press TV instead?

These questions might be worthy of some more media attention.

Wednesday, October 12, 2011

Occam’s Razor Helpless Against Iranian Bomb Plot Horsecrap

Since everybody else is tiptoeing around the issue, I might as well put my hoof in:

The “Iranian bomb plot” smells like BS.

The idea that the Iranian regime or Quds Force decided to pull this off should be fourth or fifth down the list of plausible explanations, if not lower.

It looks more like a black flag operation by Israel or Saudi Arabia.

The fact that the US decided to take the allegation and run with it should itself be a matter of interest and investigation.

After all, just as Iran is trying once again to break out of its diplomatic isolation by refloating the Teheran Research Reactor nuclear fuel swap, the State Department comes up with a new load of manure to dump on the situation.

Makes me think, the Obama administration decided to give the Jose Padilla treatment to this ridiculous scheme in order to reclaim leadership of the anti-Iran jihad, which threatened to run off under the incitement of Saudi Arabia and Israel, both of whom now regard the US as a dubious ally who no longer deserves either a leadership role or even a veto in skullduggery involving Teheran.

But there it is.

The US has blessed the story, so all the responsible commentators—even those who apparently think the idea is ridiculous—have to do some serious chin-stroking along the lines of “what where the mullahs thinking” if indeed that was what the mullahs were thinking.

I’m thinking—with all due respect to the Saudi ambassador—who gives a tinker’s damn about the Saudi ambassador?  Ambassadors are errand boys.  

The only reason to blow up an ambassador in the United States is to start a war with the US.  Does anybody think Iran wants to do that?

Does anybody think Saudi Arabia and Israel don’t want to start a war with Iran—at least get the US to fight the war for them?

Occam’s Razor gets awfully blunt when it starts to cut in the sensitive areas—or to US government BS.

Monday, October 10, 2011

Tires, Trade, and Virtual Nobel Prizes

Criticism of Senator Schumer’s legislation to punish China for currency manipulation often points out that the most likely outcome of any sanctions would be to shift manufacturing from China to some other low-cost Asia locale, not bring it back to the United States.

Paul Krugman, on the other hand, believes that the US will discover proper exchange rates and suitable areas of competitive advantage vis a vis its trading partners, if and when currencies get a chance to sort themselves out correctly.  Sanctioning China’s currency manipulation, in his view, would be an important and positive step toward that goal.

I hesitate to argue with Paul Krugman and his Nobel Prize…actually the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel  (Nobel had no desire to give honor practitioners of the dismal science; the Swedish state bank gave itself a feel-good present on its 300th anniversary by endowing the prize in 1968 and the Nobel foundation obligingly went along.  I suppose that the Ikea Prize in Ready-to-Assemble Furniture in Memory of Alfred Nobel can’t be far behind)…

Anyway, foreign currency trade is immense and can quickly change the international economic landscape, at least on the current account.

However, I think the emphasis on nation-to-nation competition is misplaced when it comes to the capital account and corralling investment in nice new factories.

The dynamic that drives international investment today seems to be nations in a losing struggle to pursue national advantage while global corporations succeed in pursuing global corporate advantage. 

Corporations love profit.  But they love growth in profits even better.  And America is not delivering the growth.  

When the US slaps China around, China loses.  American corporations gain.  But not in the way one might expect.  They gain by adjusting production within their global portfolio of factories with an eye to optimizing growth opportunities.

Instead of looking for merely adequate advantages in the country of its birth, I believe, capital, as befits its globalized, fungible character, flows overseas seeking optimal returns.

I'm sure there are plenty of non-Nobelist as well as Nobelist economists who would be happy to set me straight on this matter.

When they do so, they can also address the issue of US protective tariffs targeting cheap Chinese tires.   

Globalized tire companies, including those that are US-registered corporations, profited. 
They didn’t profit by increasing US output.  They profited by shifting supply to their other low-cost plants in Taiwan, South Korea, and elsewhere.

And they took those profits and reinvested them…in China.  Because that’s where the growth is.
Here’s the article I wrote about the tire tariffs in Asia Times.  You can click through to the AT archives to get the article and the links.

US drivers pay steep price for China tire tariff

A World Trade Organization appeals court has ruled in favor of the Barack Obama administration on the issue of the tariff it slapped on imports of Chinese tires in 2009. With President Obama's acceptance of the recommendation of the US International Trade Commission, Chinese tires were assessed at an eye-popping tariff of 55% in 2009, declining to 45% on 2010 and 35% in 2011.

A certain amount of misinformation is apparently de rigueur in cases of this sort. No, for Tom Barkley of Marketwatch, the US levy was not a "punitive" tariff. [1] It was a protective tariff, one that acknowledged that the Chinese tires were cheaper, but that the influx was causing unacceptable hardship to American industry.

The Obama administration imposed the tariff under Section 421 of the Trade Act of 1974. Per the US China Business Council backgrounder, "the statute allows the United States to impose duties or quotas to counter 'market disruption' caused by rapidly increasing imports from China. Unlike other trade remedies under US law, the imports don't have to be proven to result from dumping or other illegal actions. [2]

As a price of acceding to the WTO, China agreed to accept imposition of national protectionist measures - aka a "Transitional Product-Specific Safeguard Mechanism" - if discussions failed to cope with a situation of increased Chinese imports that "cause[d] or threaten[ed] to cause market disruption to the domestic producers".

Paragraph 16.4 of China's Accession Protocol defines "market disruption".
Market disruption shall exist whenever imports of an article, like or directly competitive with an article produced by the domestic industry, are increasing rapidly, either absolutely or relatively, so as to be a significant cause of material injury, or threat of material injury to the domestic industry. In determining if market disruption exists, the affected WTO Member shall consider objective factors, including the volume of imports, the effect of imports on prices for like or directly competitive articles, and the effect of such imports on the domestic industry producing like or directly competitive products. [3]

It would appear to be a fool's errand to challenge this ruling, giving the avalanche of Chinese tires that entered the US in 2006-2008 and the obvious implications for employment in the US tire industry.

According to the United Steel Workers Union, Chinese tire imports by volume grew 215% from 2004 until 2008, reaching a volume of 46 million tires. [4]

However, the Chinese case was not quite as weak as one might think.

The PRC's representatives argued that US manufacturers had made a strategic business decision to focus on the most demanding - and profitable - customers, who would not accept a no-name import: the auto manufacturers (known as OEMs or original equipment manufacturers) and the so-called "tier one" replacement customers, who paid more for brand-name, high performance tires.

As a result, the Chinese and other suppliers rushed into the "tier two" and "tier three", that is the cheap and cheaper unbranded market, to slug it out.

Perhaps more to the point, it appears the PRC was attempting to draw a pre-emptive line in the sand and establish some procedural and interpretive precedents to inhibit the serial imposition of protective tariffs in trade disputes.

The PRC asserted that the US procedures leading up the imposition of the penalties had been excessively subjective and slapdash and did not rise to the standard of evaluation demanded by section 16.4. The effort was an outright failure.

The appeals panel slapped down the Chinese, and received aid and comfort from friends of the court briefs filed in support of the US position by the European Union and Japan.

The ruling does not make for particularly inspiring reading. Especially at the appellate level, the "rule based" world order that the US professes to promote and, when convenient, adhere to, is largely a matter of legalistic wriggling.

The PRC asserted that the US had cherry-picked the data to focus on the year of biggest increase, 2008, and had failed to define what "rapid growth" actually was; the WTO ruled that there were no limits on subjective interpretation.

The WTO also ruled that "material" injury was a lower bar than "serious" injury and relieved the US of any obligation to make the case that a specific amount of injury had been caused by Chinese imports, as opposed to other factors such as strategic decisions by US suppliers, the global recession, or competitive pressures of other exporters.

For instance, since Chinese imports were cited as one of four factors in the shutdown of a Bridgestone plant in Oklahoma, that was taken to be evidence of "material" injury, albeit of an undefined degree, that justified the protective tariff.

Moving beyond the ruling, the end result of this protectionist posturing was not terribly impressive.

As free-trade advocates (and the Chinese) quickly pointed out, the result of the protective tariff was not to spur a significant increase in US employment in the tire sector.

Instead, the supply sourcing shifted from the PRC to Taiwan, South Korea, Japan, and Indonesia, all happy to divvy up the low-end market, presumably at higher prices now that the PRC, the most significant low-cost producer, was out of the picture.

In 2010, the US China Business Council issued a widely-publicized (at least in China) Issue Briefing that stated:

Comparing the first half of 2010 with the same period in 2009, total US tire imports affected by the 421 tariff are up 21% by volume and 30% by value. China's share of those imports has dropped from a peak of 45% in August 2009 to just 24% in June 2010. In other words, Americans are buying more tires from overseas - we're just getting the tires from places other than China. [5]

During the same period that the Chinese tires were shut out of the US market, the price of tires jumped over 10%.

Perhaps most students of international trade and foreign relations do not spend much time reflecting on the plight of the financially strapped US buyer of low-end tires - or the retailers that service them - but this October 2010 report from Barry Schlachter of McClatchy, provides some food for thought:

Overall, consumers are paying about 12% more for blackwalls than a year ago, said Bonnie Moreland of Texarkana, Texas-based Golden Star Tires, adding that the jump would be even higher if he didn't absorb some of the waves of price increases imposed by manufacturers.

Dealers who advertised specials like four ''economy'' tires for $99 three years ago are selling them today at $299 to $340 - if they can find the products, said George Salinas, co-owner of G&M Tires in Fort Worth, Texas.

The higher cost makes it harder to stock tires that are available.

''I used to carry 300 tires,'' Salinas said. ''Now I have less than 100 in stock because I can't afford to have them sitting on the shelf.''

Jim Smith, editor of Akron-based Tire Review magazine, which covers the retail industry, said: ''Dealers are terribly frustrated. They've always complained about prices, but this is different from historical grousing. This is a real-world, dollar-and-cents issue for them right now. They can't get customers in the door because of the prices.''

Sam Timmons of Fort Worth Tire, which sells used and new tires, says it's harder finding road-worthy tires for resale because they're being driven longer and come in bald.

"Because of money problems, people are running them until they're as slick as pavement," said Timmons, who laid off five employees in February 2009 and hasn't been able to replace them. "We spend $20,000 a year getting rid of the junk tires. We just get a trickle [of good used tires], and they're sold within days." [6]

However, the true significance of the Chinese tire affair - and even the jump in tire prices - is not the ancient story of the futility of protectionism. It's more about the consequences of globalization.

Tire-making is a globalized affair, driven by the needs of the globalized automotive industry. The automakers are world corporations pursuing world markets. GM sells more cars in China than it does in the United States. And global cars need tires from global suppliers.

When Chinese tires got squeezed out of the US market, they were replaced, of course, by other imports. But not necessarily imports by foreign brands. Many of the tires came from the global plants of the world majors, like Cooper Industries and a host of others.

South Korea's Hankook Tires - which has no US factories and has announced its strategy is to become the number one tire company in China - supplied 10 million tires to the US market in 2010. With a verbal awkwardness that is somewhat charming, it stated in its 2010 annual report:

"[American Regional] headquarters diversified production sources to circumvent the additional 35% safeguard tariff on Chinese-made tires."

Bridgestone Taiwan, which historically did not export, recorded a gratifying bump of one million tires in 2009.

Significantly, when the anti-PRC tire action was first mooted, neither one of the two nominally US tires suppliers, Goodyear and Cooper, supported the effort. True to their globalized priorities, they cared for the continued opportunity to maximize access to all markets for all their plants in every corner of the world.

Cooper is headquartered in Findlay, Ohio. It has plants in China that were a major source of low-end tires for the US market. When the protective tariff hit, it didn't start sourcing cheap aftermarket tires from its US plants to replace the Chinese supply. It shifted to its partners in Taiwan and South Korea to supply the US market.

Cooper, in fact, filed a statement with the US International Trade Commission opposing the protective tariff. In a public version made available by the website US China Law Blog, Cooper stated:

Cooper Tire has not abandoned the US tire market, and intends to continue some production in the United States. Cooper Tire invested in China because it could not compete on costs with lower-cost tires being imported by other US producers and importers from many different countries, not just China. Cooper Tire's customers were demanding lower-priced tires. The tires produced in China are made at a lower cost and allow Cooper Tire to even-out its overall production costs, compete for sales in the United States, and meet its customers demands. The reason the tires in China can be made at a lower costs is due to lower labor costs (including hourly rates and benefits), some (but not all) lower raw material; and much lower litigation costs (for not only product liability issues, but also US regulatory issues and other contractual disputes). [7]

The prime mover of the ruling was always the United Steel Workers union, which represents workers at 13 plants within the United States. In the end, the USW initiative arguably gained a few hundred jobs at the cost of tens of millions of dollars in increased tire costs for American consumers.

A certain amount of market inefficiency for the sake of increased employment is defensible. Or, alternately, the strategic and psychic satisfaction of poking a stick in the eye of the Communist Chinese dragon could be added to the rather short list of benefits of the tariff.

However, the most significant net effect of the tariff was to put more money in the pockets of Cooper and other globalized tire manufacturers. In the true spirit of globalization, these extra nickels did not necessarily trickle down to US workers.

Nor were these extra nickels denied to the PRC tire industry. Instead, it appears that the bulk of any tariff windfall will be invested overseas, in locations that not only provide cheaper labor costs - they offer faster growing markets.

Markets like China.

In August 2011, Tire Business magazine reported that global tire manufacturers had announced almost $10 billion in capacity expansions in the last 12 months:
Asia/Pacific accounts for nearly two-thirds of the budgeted investments, with Latin America getting $1.4 billion, or nearly 15%. Europe garnered a bit more than $1 billion and North America is getting $921 million, although Conti's greenfield plant project is not part of that figure.

Tire Business noted the following China projects:

·  Bridgestone: $251 million to raise passenger tire capacity at two plants in China.
·  Taiwan's Cheng Shin Rubber Co Ltd/Maxxis International: two new plants (their fifth and sixth plants in the PRC) at Xiamen and Chongqing, total investment of around $500 million.
·  Cooper Tire & Rubber Co spent $116.5 million to buy the 50% stake in the Cooper Kenda Tire Manufacturing (Kunshan) Co Ltd joint venture in China.
·  China's Double Coin Holdings Ltd: $475 million passenger / light truck tire plant in Anhui Province in eventual partnership with Michelin.
·  Goodyear: In the words of Tire Business, Goodyear "has begun trial production of passenger tires at its new Pulandian factory in Dalian, China - the company's first step toward replacing its existing factory in Dalian and doubling annual car tire capacity in China to more than 10 million units by 2015. The project is valued at $700 million over five years, about $200 million higher than previous disclosures."
·  Hankook: $954 million through year-end 2015 for a car and truck tire plant in Liang Jiang Xin Qu, near Chongquing, China, capable of making 11.5 million car and medium truck/bus tires annually.
·  Michelin: $1.46 billion for a car and truck tire plant in Shenyang, China.
·  Toyo: $22 million investment in China's Shandong Silverstone Luhe Rubber & Tyre Co Ltd.
·  China's Triangle Tyre Co Ltd: $388 expansion to its Weihai, China plant.

The US take, about $1.5 billion of the total, as opposed to about $5 billion going into China:
·  Bridgestone: $125 million investment at its Aiken, SC plant.
·  Michelin: $250 million for capacity increases at its Lexington, South Carolina and Woodburn, Indiana plants.
·  CGS Holdings (Czech manufacturer of agricultural tires): $67 million for a plant in Iowa.
·  Continental has announced plans for a major greenfield plant based in the USA "to serve the NAFTA [North American Free Trade Agreement] market" [ie Canada, the US and Mexico] with a possible budget of $500 million.
·  South Korea's financially-strapped Kumho Tires has put its announced plant in Bibb County, Georgia on hold until at least 2013.

As for major US investments by the two US-headquartered majors:
·  Goodyear: zero.
·  Cooper: zero [8]

In its 2010 Annual Report, Goodyear cited "increased low-cost country sourcing" and "continued progress in actions to reduce ... high cost manufacturing capacity" as the cornerstones of its effort to dig itself out of its financial hole.

In a slideshow accompanying its 2011 second-quarter filing, Goodyear cited the "accelerated closure" of its Union City, South Carolina plant as an example of "Operational Excellence". As for "Enabling Investments": "First production of tires in new China factory" and "Expanding China retail network". [9]


Returning to the issue of the spike in tire prices in the US, the high protective tariff on Chinese tires was an enabling factor - but perhaps in a relatively unexpected way. It was not merely a matter of increasing the sales cost of the world's major low cost supplier so that other suppliers could compete in the "second- and third-tier" markets.

What appears to have happened instead was that the tariff to a large extent temporarily eliminated the low-end market, pushing consumers (at least those consumers who could afford it) toward the higher-end tires available from the global majors.

This shift exacerbated the supply problems in the United States in 2010 - when the tire industry was caught between its recession and restructuring - driven plant closings and the revival of the North American auto industry, thereby driving up prices.

The three-year window provided by the high Chinese tariff apparently did not lead to a fundamental restructuring of supply in the US low-end market, certainly not by US domestic producers; it simply temporarily tightened supply and gave tire companies a three-year opportunity to "make hay while the sun shone".

As for 2012, the year the tariff is supposed to go away, a China-tire hand wrote to Modern Tire Daily, the bible of the US tire salesman:

I have been dealing with China since middle 1998. At one point I worked for a major Chinese company for a year, and consulted with them after that. My China product sales at one point reached some 50,000 pieces a month.

Immediately after the 35% duty add-on, it dropped to 2,000 to 3,000 pieces a month average: some months in a row zero, some months 4,000 to 5,000. Today, it barely averages 3,500.
Many (US) compan[ies] have swallowed the increases, as even with 35% on the top, they still need tires, and the US either does not make [them] or is still higher. But stay tuned for mid-2012.

"My perception is that around April, at least in May and June, near 100% (of the US) companies will stop placing monthly production orders, waiting for the rest of the absurd, union-supporting, thanks-to-Obama duty to go away in September. The Chinese are very much a keep-the-factories-running country. No orders will not stop them from making tires. [It will] just stop tires from being shipped for two to three, maybe up to four months.
"And then the flood gates will open, and the world will see a price war like never before in history. Prices will drop like a lead balloon. [There] will be total chaos... [10]

Predictions of a tire Armageddon may be overstated. But it appears clear that the low-end tire market is still very much a Chinese affair. Global manufacturers manufacturing inside the United States did not discover a new-found love for making inexpensive, unbranded tires even when the duty is high, and relief for the consumer of cheap tires will appear only when the duty drops.

Under China's WTO Accession Protocol, other countries are only supposed to have a 12-year window for imposing protectionist duties. So one might expect that the United States will be looking at other ways to manage the China trade relationship.

However, 2012 is an election year, and a year in which the promise of jobs, any jobs, to reassure an American electorate afflicted with an official unemployment rate of over 9% may be welcome.

The US Trade Representative's office cited the creation of 3,000 jobs and $500 million in investment in the US tire industry since the tariff went into effect and welcomed reporters (perhaps rather half-heartedly) to connect the gains to the 421 tariff.

So don't expect protectionist sentiment to evaporate any time soon ... and don't be too surprised if the tire tariff is extended.

US looking carefully at China rare earth policy, Market Watch, September 6, 2011.
Tariff on Chinese tires 10 months later - right or wrong remedy?, USCBC, August 2010.
Acession of the People's Republic of China, WTO, November 23, 2001.
Consumer Tire Imports from China & US Industry Job Losses, United Steelworkers, Apr, 2009.
Tariff on Chinese tires 10 months later - right or wrong remedy?, USCBC, August 2010.
Tire prices rolling uphill,, Oct 17, 2010.
Comments of Toyo Tire Holdings of Americas Inc, China US Trade Law, 2009.
8. Click
here for details.
Second Quarter 2011 Conference Call, Goodyear, July 28, 2011.
Will there be a price war when the tariffs on Chinese consumer tire imports are eliminated? Modern Tire Dealer, July 28, 2011.