Ground Floor: Economics was an optional extra on our school curriculum and I decided to take it because the teacher who offered it to us told us that there were "no right or wrong answers, you simply have to argue your point".
I remember a heated debate among idealistic 16-year-olds about the value of tariffs to protect indigenous industry - at the time we were talking about milk supplies in Ireland, which shows how little things change over time.
And now, on a global scale, we're talking about tariffs again, more particularly the steel tariffs imposed by the US, which the World Trade Organisation (WTO) has found to be illegal.
In March 2002, the US imposed tariffs ranging from 8-30 per cent on certain steel products for a three-year period. The EU and a number of other countries immediately started a WTO dispute settlement procedure. In the meantime, the EU also notified the WTO that it was reserving its right to "rebalance" the adverse effects of the US action, which meant it could apply some tariffs of its own.
This is exactly what we used to debate in school - retaliation! You diss my exports, I'll diss yours. The EU's retaliation can automatically apply from December of this year unless the US removes those tariffs that the WTO has ruled illegal. And the EU's choice of retaliatory tariffs hits a nice mix of Bush-important products - Florida orange juice being the headline item, which makes everyone smile. The list, which also includes the eponymous Harley Davidson bike, is valued at about $2.2 billion (€1.8 billion).
Part of the problem of all international trade disputes lies with the fact that countries tend to tax their people and their businesses differently.
The US taxes its businesses wherever they are located whereas the EU only taxes what's earned or sold in the region. This means that it doesn't impose VAT on goods sold abroad. The US regards this as giving EU firms a competitive advantage and has spent the past 25 years trying to eliminate this by exempting certain overseas profits from tax.
But it's difficult to do this without breaking global trade laws because tinkering with the rules usually means that the country concerned can be accused of providing an export subsidy which is not allowed.
The Americans have imposed and then had to lift a raft of different measures over the years and the current steel tariffs are simply part of an ongoing trade war soap opera.
Usually tariffs are imposed to help a new industry to find its feet. In the case of the steel industry, however, the rationale is completely different.
It needs time, according to Bush, to restructure for the future. It's weighed down by costs and overcapacity.
It could be that these arguments are perfectly valid and that the WTO could have sanctioned the imposition of protectionist measures. However, its ruling claimed that:
The US failed to demonstrate that alleged increased imports were as a result of unforeseen developments.
For most products, imports have not increased.
The US did not properly establish the causal link between the alleged increase in imports and the purported serious injury faced by the US steel industry.
The US excluded imports from Canada, Mexico, Israel and Jordan from the measures.
Over the past year, the steel industry has insisted that it has made radical improvements but it hasn't managed to prove that this has been as a result of the imposition of tariffs.
The net result of all this is more bellicose words between the US and Europe (apparently Bush asked European Commission president Romano Prodi why Europe is attacking his family). George W is concerned about his image at home. There's an election in 2004, after all, and he needs the support of steel-producing states.
In further patriotic fervour, the imposition of European tariffs against US orange juice might weigh support in behind Bush rather than making voters in Florida ask why the EU is acting that way.
Meantime, the US has more trade agreements to worry about. Talks to create a free-trade zone throughout the Americas - from Canada to Argentina - are under pressure amid claims that Bush has already rowed back from the original vision to a smaller arrangement that might simply cut tariffs for non-agricultural products.
The initial proposals covered a wide range of issues, including investor protection and intellectual property. A scaling down of the agreement would seriously peeve the Canadians who are counting on these deals to open up new markets.
The whole basis of trade agreements is to open markets. But the US believes itself to be the most open already and is of the view that others should liberalise more before it agrees to anything else.
Our sixth-year economics class concluded tariffs caused more problems than they solved. We also believed imports are just as important to a country's economic wellbeing as exports. Adapt and compete was our conclusion. It was easy to make those decisions in the safety of the classroom and in the knowledge that it didn't matter whether the answer was right or wrong. But in the real world it does. And nobody wins a trade war.
