Issue of the week: Drifting toward protectionism

In an echo of the ruinous trade wars of the 1930s, trade disputes are breaking out across the globe, said Mark Landler in The New York Times. Since last November, when the G-20 nations pledged to not erect new trade barriers for a year, 17 of them have adopted a total of 47 measures “aimed at restricting trade.” Russia has raised import duties on used cars, China has cracked down on food imports, and Argentina has erected barriers against imported auto parts. About a dozen countries, including the U.S., are subsidizing domestic car companies or dealers. The dispute making the biggest splash at the moment is a spat over Mexican trucks on U.S. roads. A measure tucked into the $410 billion omnibus spending bill that President Obama recently signed into law “scrapped a program enabling Mexican trucks to haul cargo over long distances on American roads.” In retaliation, Mexico slapped duties on $2.4 billion in American goods—“from pencils to toilet paper.”

So it’s come to this, said George Will in The Washington Post: Mexico is giving us “instruction about fundamental rights and the rule of law.” But we obviously need it. By barring Mexican trucks, Obama is “shredding” the 1994 North American Free Trade Agreement, which requires the U.S. to allow Mexican trucks on U.S. roads. But that provision had long angered the powerful Teamsters union, which sought to block liberalized trucking rules by claiming that Mexican trucks and drivers were unsafe. The pilot program that Obama killed was designed to test that assertion, and it proved to be an embarrassment to the union. Not only did evidence emerge that Mexican trucks are often better maintained than American ones, Mexican truckers have been shown to drive more safely than their American counterparts. The solution? Kill the program, of course.

It would be funny if it weren’t so serious, said Edward Glaeser in The Boston Globe. Legislation such as the trucking ban and “Buy American” provisions in the $787 billion stimulus package serve only to encourage other countries “to bolster their own domestic industries and shut out foreign producers.” But this approach is completely self-defeating. Our trading partners sell us much-needed goods and lend us the money we need to keep our government running. “Shutting our markets will make life more expensive for us and hurt the rest of the world.” We made that mistake in the 1930s, when protectionist policies helped spark a worldwide depression.

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The next flash point could be a proposed ban on so-called carbon-intensive Chinese imports, said Ian Talley and Tom Barkley in The Wall Street Journal. Energy Secretary Steven Chu told Congress last week that he favors using tariffs as a “weapon” against China and other countries with looser greenhouse-gas emissions standards than our own. The tariffs, Chu argued, would force those countries to pay for their polluting ways. The Chinese responded that such tariffs would be a “disaster” and ignite a trade war. The moral of the story: Protectionism is protectionism, even when it’s fashionably dressed in green.