Probably the biggest single difference between Mark and myself is that I think trade can promote economic growth, and often does promote economic growth. I'm very skeptical that this trade round will have those results - I won't say it's impossible, but I'm skeptical. I think Mark is much more skeptical about the possibility that trade and economic liberalization -- broadly called globalization -- will promote economic growth.

Let me lay down a couple of markers of what you guys - the press - should be looking for in terms of failure. The biggest, most obvious failure would a street theater overwhelming the meeting.

My expectation is that the Mexicans will control the NGOs. I think disruptive street demonstrations will not happen. The second biggest and more likely failure, but I would still say improbable failure, is a walk-out by a group of the developing countries, not just one or two, but a major group, a conspicuous walk-out. There was some of that going on in Seattle, but it wasn't as dramatic as it could have been. I really don't expect either of those things to happen, but I could be wrong. On the other hand, I am very skeptical about what objective people might label as a big success, though of course trade diplomats will characterize the smallest agreement as a success.

I think the success that will occur has already happened, that's the TRIPS agreement on pharmaceuticals - the agreement on compulsory licensing on pharmaceuticals. However, the amount of economic improvement at stake in developing countries from what has been done or what could be done in compulsory licensing is much, much smaller than the advertised discussion. On this point, I am speaking from a briefing that the American Enterprise Institute held the other day on this.

Very few countries use compulsory licensing. It is possible, but it's hardly ever used. Secondly, India, which is a country where you can manufacture just about any pharmaceutical without bothering with patents, has 5 million cases of AIDS. And the relevant statistic here is that less than 50,000 people get AIDS drugs. The problem in India is not the ability to use compulsory licensing since 85% of drugs anyway are not on patent, but the distribution of drugs. So, while the agreement will make a rhetorical difference, this is not as big a deal as advertised by pharmaceutical companies. And the real issue at stake in this battle is what precedent has been set, not the amount of money that would be changing hands on account of compulsory licensing. Pharmaceuticals depend on discriminatory pricing. The WTO deal is just one very small part of the whole discriminatory pricing debate. I discuss this issue more in my paper. The pharmaceutical industry does not want to see barriers come down that separate, for example, the U.S. and Canadian markets.

Let me just quickly mention the other issues that I think are much more difficult and will not be concluded at Cancun. Let me start with two big conceptual hurdles.

Most poor people live in India, South Asia, and China. No one wants to give trade preferences to India and China because they are industrial giants. So already you have a disjuncture between where poor people live and the focus of the Development Round. The focus has been on the poor countries in Africa and Central Asia, but numerically more poor people live in India and China.

Secondly, in terms of trade doing something for economic development: import liberalization is, in my view, equally if not more important than better access to export markets. But out of the Doha agenda came the notion, in developing countries, that industrial countries would do all the import liberalization. Developing countries came away from Doha thinking they're not going to do any of this politically painful import liberalization. And so, already you have a problem there in terms of the development benefits. But you also have a problem in terms of the mercantile logic of trade negotiations. Reciprocity is a big part of the deal. But reciprocity was downplayed in the Doha formula. That's a big conceptual problem.

In agriculture there's been a very small deal done on export subsidies, and some general talk about cutting domestic subsidies in half. I want to do a quick reference to the World Bank paper called "Global Economic Prospects," which I saw it on the Web yesterday. It has all sorts of useful numbers and ideas. Speaking specifically on agriculture, just a quick reprise of the numbers:
The OECD countries pay about $330 billion on overall support for agriculture. About $80 billion of that goes directly to consumers for buying food stamps and so forth. The other $250 billion goes to producers. Again, $80 to $90 billion is direct government subsidies - you know, checks written by the governments in Europe, the U.S., and Canada. The other $160-170 billion is market access barriers. Now, what they talked about is reducing subsidies, starting with exports subsidies, which are a very small part of that $80 billion... that's only about $5 billion. But they're not really talking much about increasing market access, and that's the $160 billion - that's the biggest part of agricultural support. Often when the press writes about agricultural support, they talk about as if all the support takes the form of subsidies in the sense of checks from the government

But most of the support for producers is barriers at the borders, and nobody wants to give them up - not us, not the Canadians, not the Europeans, and not the developing countries either. Hence I put chances of a success at less than one in five, meaning a success at the end of the Doha Round.

Manufactures tariffs: again, the real problem, coming out of the Doha declaration, is that developing countries (Brazil, India and others) think that they will keep their manufactures tariffs, but that Europe and the U.S. would get rid of their tariffs. What's left of manufacturing tariffs in developed countries covers some very sensitive products. But the average is not high. So the U.S. tariff profile is like Monument Valley: what's left, after lots of erosion, is the really hard rock. And, you know, that is not easy to erode. The same is true in Europe and Japan. And meanwhile the developing countries don't want to lower their tariffs, so at the end of the day, it's hard to get people to agree on a tariff-cutting formula.

I will leave services to the question period. I wouldn't say that if Cancun doesn't produce a big success that that alone spells the end of the round. You very seldom get a big success in midterm ministerial meetings. I see the problems in the Doha Round as deeper than the "midterm problem". What happens in Cancun could be a prelude to a larger failure.

Mark Weisbrot: I'll also try to be brief, and if people want more information our website is at www.cepr.net.
I actually agree with Gary that trade can promote economic growth, and certainly played that role historically.
The question more is whether the rules included in these commercial agreements, such as the WTO or NAFTA, promote economic growth. Because they're not even so much about trade very often as they are about investment and intellectual property, for example. And they're certainly not about free trade. So I would judge the success or failure out of this round more on the public's understanding of what comes out of this round. Because right now I think there's as huge public misunderstanding. People believe that the World Trade Organization is really about making a set of rules for global trade so as to facilitate free trade. And that's the general understanding, and that's extremely inaccurate. And they also believe that this set of rules and the policies have been shown to lead to economic growth - that is, this form of liberalization. And there's no evidence for that either - this is kind of a faith-based argument.

We know from economic theory that trade produces efficiency gains, ever since David Ricardo put forth his thesis 150 years ago. But if you look at the last 20 years of liberalization, for example, you have an extremely sharp slowdown in growth for the vast majority of developing countries. So for Latin America you went from a growth rate of 75% per capita over the 1960-1980 period to a rate of growth of 7% over 1980-2000. And now you have the first few years of this decade, if you include the projections for the next year, you have another lost half-decade. You have actually negative per capita growth for Latin America since 2000. Of course Africa is even worse. And if you take again the vast majority of developing countries, this is the story... and you also have a slowdown in the rate of progress on life expectancy, infant mortality, literacy, and education. This may partly be due to changes in income distribution but probably is mostly due to the slowdown in growth.

So, while it is true as Gary said that trade can promote economic growth, there's no evidence that the people currently running the show have any kind of formula for using trade to promote economic growth. The Latin American failure, by the way, is enormous. You can't even find a 20 year period over the last 100 years, even the Great Depression, that is as bad as that.

So that's the first point I would like to make, because people think it would be a terrible thing if further progress at the WTO is not made. But it's not clear at all that further progress in the sense of success that would be described by the negotiators is further progress for the world, or at least for the vast majority of people in the world.

Now the other thing is that the gains from market access have been highly exaggerated. So there's a big fight over the U.S. and the rich countries opening up their borders and eliminating agricultural subsidies. But if you look at the "Global Economic Prospects" that Gary just mentioned... I haven't seen the most recent one, but if you look at last year's edition - Table 6.1, I have it with me - and they project what do the low- and middle-income countries actually get, by 2015, if you were to eliminate all the barriers to merchandise trade in all the high-income countries, and subsidies as well. And the answer is, about 6/10ths of 1% of GDP. Not annually, but by 2015 you'd have an extra 6/10ths. In other words, a country with a $500 income per person in Africa would have, by 2015, $503 per person if all liberalization would take place, as opposed to $500 if nothing was done at all. And this is assuming that the gains don't all go to China, but that it's evenly distributed throughout the world.

So, that is not a huge thing...there are a lot of reasons for this. These things cut different ways. You eliminate a quota, you're eliminating the rent that the exporting country gets, so they lose out there. Certain exporting countries are better off with the quotas. You eliminate the subsidies - the big demand now by a lot of NGOs - that also cuts both ways. As Gary would agree, and any international economics class will tell you that subsidies are a net gain for the importing countries as a group. Now that doesn't mean it's always a good idea, because it often wipes out domestic agriculture.

The simple solution in countries that are having to compete with subsidized crops - Mexican corn growers, for example - the easy solution to that is to simply allow countries that don't want the subsidized food to place a tariff on it, and then allow the countries that need the cheap food to feed their people, to let it in. And the idea that leveling the playing field and saying "well we're just going to eliminate all barriers and subsidies," which is the goal of the WTO - this is wrong… Mexican corn growers, and all the tens of millions of farmers who will be wiped out in China, if they actually implemented what they agreed to... they're not going to be able to compete with U.S. and European agriculture, even if you eliminate all subsidies. Because from an economic point of view, there's no difference between a subsidy and an increase in agricultural productivity, in terms of its effect on the price. I never understood this idea that it would be fair if you eliminate all the subsidies and this is going to take care of the problems. The displacement you would get under the elimination of agricultural barriers in the developing countries is potentially enormous. In China your have 47% of the population still in agriculture. In the United States you had 53% of our population in agriculture in 1870... and it took 100 years for us to get down to 4.6%, and you still had massive social unrest along the way. This is not a realistic or practical goal for developing countries to reduce their agricultural barriers as much as the negotiators want them to. And Gary's right to point out that most of the gains are on the import side. That's the traditional theory of comparative advantage, right? The World Bank's projection, for example, finds that the gains from imports are twice as big as gains from market access. The thing about this, though, that we have to remember, is that you don't have to force people to open up their borders. If they have gains to be made from opening up to imports, they should be able to do this voluntarily. Most of the gains are on the import side, so really it's hard to think of a justification for having this kind of pressure.

Finally, I want to mention the TRIPS agreement, I hope we have time to talk about it. This is another example - which Gary of course mentioned, the fight over pharmaceuticals - that shows how wrong the impression is that people have of the WTO. This is economically more important than market access, for example… Again, all the losses developing countries stand to have from TRIPS are greater than the actual gains they would get from complete market access to all the rich countries' markets. And TRIPs - you know, this is a protectionist thing. Again, the real free trade economists like Jagdish Bhagwati at Columbia University say straight up that TRIPS doesn't belong in WTO because it's just an instrument for the pharmaceuticals companies, and owners of copyrights and people like that. So this is the very opposite of free trade, this is actually protectionist. And unlike the protectionism of tariffs on traded goods, this is a much more costly form of protectionism, because a tariff generally doesn't exceed even in developing countries 40%, but these are tariffs - exactly the same thing, analytically - they're tariffs that raise prices by hundreds of percentage points. There can be arguments for having these patents. For example, within the United States, you could argue that it's the means of funding pharmaceutical research or creative activity. But it certainly isn't for the developing countries. It's just going to be a huge net drain on their economy, deadweight losses as well, and in the case of the life saving and essential medicines, an actual death sentence for literally millions of people.

Questioner: Talk about displacement [from agriculture] a little bit. Do you share his view that you face this ... is this something that's going to be replicated on a greater scale?

Gary: Well, I share his view, but I'd probably put a different nuance on it. My view of development is that it's intimately related to urbanization. You look at the household earnings in a place like Mexico, China, or any developing country, typically in the rural areas they are less than half and perhaps only a fifth of what they are in urban areas on average. And the whole notion of a modern economy is one where you have a tremendous amount of urbanization. Urbanization brings a lot of network economies, a lot of external economies, and so forth. All the evidence is in that direction. So as China develops, that 47% of people living in rural areas is going to go down. It has to go down. I was somewhat critical of the World Bank that they did not say that right out. I think Mark has a point about the speed of the transition from rural to urban life. I guess I would say not a hundred years, I would say it's more like 50 years to come down from the 50% level to something like 10%. There is an issue of the speed, and that should be considered in the pace of agricultural liberalization. But you cannot produce a decent income on these small landholdings that are characteristic in Mexico. You have to have a lot of people move into the cities, and then you have to have a program to make the cities better places to live than they are now. So that would be my big point.

Mark: We don't actually disagree all that much, as you see. The problem is that the WTO is not allowing and is not set up to allow the 40 or 50 years that Gary's talking about. You do have a recipe for social explosion. The same is true, by the way, of unemployment in general. Most of these countries have widespread unemployment as the norm. In most developing countries, it's huge, often over 20%, or 30% or 40%. I agree with him that development does involve urbanization. But again, the pace is everything. The sequencing is everything. Whether people go to the cities and find jobs, or they end up in shantytowns, is the whole story, not just an aside.

Questioner: I wonder if you guys could take on these World Bank numbers. We're all reporting, and the USTR every time they give a speech, talks about how the benefits from world trade are $530 billion or $800 billion to the world economy, what that does to developing countries, number of people who live on less than $2 per day is down by 8% or 10% or something like that. And so, these are very real numbers the World Bank gives out. Where have they gone astray?

Mark: It's a very deceptive thing. That number I gave you [0.6 percent of GDP for the gains from market access] was right there in Table 6.1, but you don't hear that, they don't make an issue of that, that it's that small. They go on and on about how important it is for the U.S. and developed countries to open their markets, because this is their way of appearing to be balanced. How do they get the bigger numbers? Well, first of all, world GDP is $31, $32 trillion. You can get… 1% of that is over $300 billion, right? So that's one of the ways they do it. Another way they do it is they have these gains... it gets complicated, but, they don't tell you that most of the gains are on the import side. They try to pretend it is market access. Their numbers say the opposite, and they won't deny it. So most of the gains come on the import side, and they come in services. And so they come from these other countries opening up and lowering their barriers to trade in services, financial services, telecommunications, Wal-Mart, whatever else. Those are really not well understood by economists . . . I think that Gary would agree with me that economists have a good idea of the classical gains from trade that come from efficiency gains that we all learned in our Econ-101 course. The ones you get from having access to cheaper imports, comparative advantage, division of labor. Those are well understood. But then when they get into these areas of trade in services and endogenous growth - putting that into the model and all these other things - you can inflate these gains enormously with things that are not really well understood. That's why you have huge gaps between the estimates of for example, what is the effect of NAFTA on Canada, there is a 16 to 1 difference between what the models show. So they're all over the map in their estimations. So that's the way the numbers are fudged. And the USTR will say anything. [laughter] I remember when they were claiming a trillion dollars of gains to the U.S from the Uruguay round. People pointed out that this was mathematically impossible. I'd be happy to go through this and the actual numbers in detail for anybody afterwards.

Gary: I think Mark is right, there's a lot of ferment and disagreement on the models. You get quite a range in the models, from very low or even negative benefits in some models to very high benefits. I've shifted over the years in favor of higher estimates. The reason is I've shifted is that I think the cross-country evidence on the association
between countries that have opened and liberalized, and that have increased their trade-to-GDP ratios, is very strong. These have been the growth countries. So I regard empirical observations as support for the higher-end estimates in the models.

A couple of other points are worth making. Comparisons are often made between trade and aid. The number for exports from developing countries is about $2 trillion now. That includes China. The amount of aid distributed annually to these countries is about $50 billion. So in terms of doing anything about poverty, it's far more plausible that gains will be made by expanding trade by 10 percent, even if the benefits are only a quarter of the trade expansion, than by expanding the aid budget by 50 percent.

The other thing I would say concerns government policies: it is true that any one policy usually has a small payoff. That's true of education policy, that's true of electrification policy, and so forth. I think trade liberalization policies compare relatively favorably to other things governments might do to boost income. But governments need to do a lot in a lot of different policy areas to generate anything near the Korean growth. Putting in place a range of complementary policies has proven elusive to most countries.

Mark: But it's also a whole complex of policies that not just elusive but that are increasingly prohibited by the WTO and also the IMF and the World Bank. That's exactly what they're doing with this organization - and we didn't even get into the new issues part, the MIA [Multilateral Investment Agreement], but that's exactly what that's designed to do - is to prevent countries from actually doing what all the developed countries did when they were developing, and especially the late developers like South Korea. The whole idea of national treatment, that you can't treat a foreign firm any differently than a domestic firm. Well, Korea would still be back at the level of GDP they had in 1960 if that's what they were restricted to. Again, I'm perfectly willing to agree with Gary that trade can play a significant role in development, but the question is: Is trade liberalization the consequence of development, or is it a cause? Historically, you look at the history of any of these countries, including our own... We liberalized after we were developed enough to be able to compete in world markets. We had high tariffs all the way to World War I, when we still had an average tariff on manufacturing goods of about 44%. The same is true of all the history of the rich countries. Then when you get to the late industrializers like Japan and South Korea, there was even more intervention from the government, more things that the WTO was designed to prohibit, were needed for these countries to catch up. It's noteworthy that it was only a very small handful of countries who were able to do catch up at all.

Questioner: I'd like to go back to a figure you brought out at the beginning. The Fund and the Bank and OECD say regularly that there are $300 billion in subsidies that go to wealthy farmers. They did it again in a statement yesterday. But you said that in fact $80-90 billion is only in government checks, and the rest is market access barriers. I wondered if you could elaborate.

Gary: People do use the word subsidy rather loosely. Direct payments to farmers - true subsidies - amount to about $80 billion annually, adding up all OECD countries. But market access barriers are the bigger part of the story. Market access barriers include strict import quotas and very high tariffs. These boost internal prices high above world price levels.

Questioner: Like cotton.

Gary: We have a tariff on imported cotton from Egypt and other countries. In addition, US cotton farmers get checks from the government. Likewise the dairy complex -- by which I mean cheese, dried milk, and butter - is highly protected in the United States. U.S. barriers in the dairy complex increase wholesale prices by 50-80% across the board. In addition we don't even have free trade in dairy products within this country. Unbelievable, but true. Imports of tobacco, peanuts, rice, onions, garlic, tomatoes, lettuce -- all are limited by market access barriers. The same is true in Canada, Japan, and Europe. Everyone knows the Japanese rice story. Not everybody knows the poultry story in Europe and Canada. Canada put a tariff of 350% on poultry. When you add all this up, market access barriers come to big money. The direct payment checks are important. But I think reducing market access barriers is often harder than reducing payment checks.

Questioner: Help me understand the agricultural subsidies issue, and how developed countries are supposed to get rid of their agricultural subsidies. I can understand how getting rid of subsidies could help development… In theory I can understand that that might give developing countries a bit more competitive advantage. But in practice, is there really evidence on how this would impact developing countries… How this might be helpful to the developing world?

Mark: Well, it has been grossly exaggerated. A red herring in a lot of ways. I don't favor subsidies to rich farmers in the United States, which is where most of them go. And I think it does cause significant damage. In Haiti, for example, thousands of rice farmers were wiped out by subsidized rice that the U.S. pressured Haiti to let in. It causes damage in other countries… Cotton farmers in Chad get hurt. You can find cases like that, and it is not trivial, but again, number one, they should not be forced to let these imports in. That's the more rational solution, to say they can put a tariff on it without being penalized by the WTO. That would take care of it. But then you also have to take into account that cheap food is a benefit to some countries, as are subsidized goods in general. And again Gary would agree with me that in standard economic analysis if you're subsidizing, you're giving a gift to someone else. The only way it's harmful is when a country has a particular area of production where they're having to compete w/ subsidized goods - they lose out, but then they also lose out if the US has a higher productivity level. The U.S. has increased its productivity in agriculture rapidly over time. The whole issue has been blown out of proportion, because it's something where Oxfam and the World Bank and the WTO can all agree, that this is hurting farmers in developing countries. In terms of the overall impact of removing subsidies, it's going to be mixed, and it's not going to be that big relative to TRIPS, for example, or relative to one thing I haven't even mentioned yet - the cost of countries having to hold increasing reserves because of the economic integration that they're going through. That's an enormous cost also relative to subsidies. And by the way, in the Brown-Deardorff-Stern model, which Gary also uses in his paper… that's another general equilibrium model that's used to project the gains from trade liberalization… You have a lot of countries including the whole South American - Caribbean region that actually lose out from agricultural liberalization. In Indonesia and the Philippines as much as 1% of GDP. Again, it's all very mixed. That's why the overall number I gave you at the beginning turns out to be so small, because you have all these different effects when you remove barriers to the exports of developing countries, and some of them hurt poor countries and some of them help, depending on the country.

Questioner: You've got steel tariffs, you've got this sense of creeping protectionism… Does the Doha rhetoric trump or outweigh some of the other protectionist initiatives that we're seeing or hearing about?

Gary: To put steel tariffs and antidumping duties in perspective, when you add up all the trade disputes, the volume of trade affected is a very small percentage of world trade. Moreover, if you look at the overall WTO system, there are a lot of disputes on a South-South axis - it's not just disputes between the South and the North.

What could happen on the dispute front that would change the atmosphere? Well, one big thing would be President Bush taking a decision to revoke the steel tariffs. He could do that after the WTO Appellate Body hands down its decision, which will probably come by December. The FSC/ETI dispute is in Congressional hands, it's not something the president can decide by himself. There's another dispute that the president could, however, solve and that's the lumber dispute with Canada. The Doha negotiators are not explicitly addressing any of these disputes.

Questioner: The other sleeping tiger is China. Domestically again we're approaching another election year, and people who support steel safeguards say that we aren't really addressing anything until we address china trade.

Gary: Let me say a few quick words on China. The press - that's you guys - are certainly right about the bilateral trade deficit. The fact that we have a bilateral deficit has big political overtones. Most economists take the view that if you somehow squeeze down that bilateral deficit with China, it would pop up somewhere else. So you would not squeeze the overall deficit by just limiting imports from China, for example. Second point is that, yes, in China the economy has been growing very rapidly, and that's causing a lot of ripples and dislocations. And that will probably be the case for the decade ahead. For starters, there will probably be an enormous number of antidumping and safeguard cases against China once the textile and clothing quotas expire in January 2005.

Mark: Do you really believe that if China revalued their currency, and the trade deficit was reduced with China that it would automatically pop up somewhere else?

Gary: I'm saying that a 20% revaluation would not make much difference to the overall U.S. trade deficit, now running over $500 billion annually. I'm not saying no difference, but the notion that the U.S. bilateral trade deficit with China would shrink from $100 billion (the present level) to $50 billion is wrong, and so is the notion that the U.S. global trade deficit would shrink, say, to $450 billion.

Mark: We're running an unsustainable trade deficit in any case, so the dollar is going to fall against other currencies. Not even the United States can borrow 5.5% of GDP from the rest of the world each year, indefinitely. So I'm assuming it is going to continue to fall against other currencies. But if China does continue to keep the currency peg while the others fall, then that does grow as a proportion of our trade deficit, so it is a legitimate concern.

Questioner: What about the impact of China on other developing countries, and their willingness to be more open?

Gary: That will be an undertone, I suppose, at Cancun. For the whole range of textile and clothing trade , a lot of countries are deciding that the existing quota system isn't so bad, or at least they hope it could be preserved a little longer. I doubt the quotas will be preserved longer, but Chinese exports might well be restrained in some complex fashion. But yeah, there's a lot of concern by developing countries that they will be overwhelmed by China. But like the U.S., they too can avail themselves of WTO safeguards, and it's very easy to put up safeguards against Chinese exports. I think that countries like Brazil and Mexico will use safeguards.

Questioner: What's your hunch on this deal? Do you think that Bush is going to revoke the steel tariffs.

Gary: I think the chances are about 40%. The reason is that the United States has taken a lot of flack over the steel tariffs - both from steel users in this country and from foreign suppliers. I think Bush could make a big symbolic gesture by revoking the tariffs ahead of their scheduled expiration date in March 2005.

Mark: In the pharmaceutical and TRIPS negotiations, they pretty much had agreed to go along with the Doha declaration, and then the pharmaceutical companies said "no, we don't want this," and that's how that broke down in December.

Questioner: Have you looked at the effectiveness of the tariffs and the backlash from the steel-using companies, and the economic impact - and the notion that some say this sort of proves that tariffs are irrelevant in a globalized world?

Gary: I thought the calculations by CITAC were on the high side. They had a couple hundred thousand people unemployed in the steel-using industry on account of the tariffs. The highest number that my colleagues and I could come up with was something like 50,000 jobs lost in the steel-using industry. But I do think that backlash among steel users is the reason Bush would reverse the policy.

Questioner: But to the question of whether or not that underscores the irrelevance or the impractical nature of tariffs in the 20th century...?

Gary: I don't think they anticipated that the steel-using industry would politically coalesce to the extent that it did. They were hurt by previous protection, but the users were always kind of disorganized. This time they got very organized and very vocal. But the purpose of a tariff in this kind of case is to give a big lump of sugar to a very concentrated industry, and hope that the costs are ignored. Nobody ever thought that by protecting steel you would increase the total number of jobs in the U.S. But you reshuffle jobs around in the economy and hope that the loser wouldn't notice or wouldn't be vocal, and here they were. That was a big change.

Questioner: So the volume of imported steel in the United States hasn't changed?

Gary: No, it did. The tariffs reduced the volume and increased the price.

Questioner: But if you go back before the tariffs were imposed?

Gary: We put some numbers up on that. We say the impact was not as big as the industry would have liked, and as big as the steel-users complained, but we thought it was a discernable impact. Typically the biggest impact was on smaller firms, which did fabrication. Say were dependent on slab or flat steel coming in from Korea or Japan or China and suddenly the price of that stuff went up 30%. Poof, there went the operating margin.

Mark: If the dollar falls against other currencies it's going to have the same effect as the steel tariffs. I think that's often left out of the discussion, these discussions about steel tariffs and foreign exporters. The impact here of an overvalued currency . . . You know the actual numbers on the steel tariffs are very hard to figure out. But the overvaluation of the dollar is certainly comparable to any tariffs that we're talking about.

Moderator: Thank you very much.