Unclean Hands: America's Protectionist Policies

Topics: Free trade, International trade, Protectionism Pages: 12 (4748 words) Published: May 8, 2013
Unclean Hands: America's Protectionist Policies
by Stuart Anderson The author formerly was director of trade and immigration studies at the Cato Institute. American policymakers often justify trade barriers against other countries on the premise that the United States practices free trade while other countries erect trade barriers and engage in unfair trade practices. Claiming to favor "free but fair trade," they propose that America keep its markets open only to countries that dismantle their trade barriers. But in fact American policymakers often erect barriers and indulge in the kind of unfair practices that they are fond of denouncing. Russia's Ambassador to the United States, Yuri Vorontsov, at least was honest when his government increased its tariffs on American poultry. He delivered a forthright defense of protectionism, noting that "the cost is on the shoulders of the Russian consumer, as usual."1 He did not claim to be reacting to American protectionism. But if he follows the example of U.S. policymakers, he might well use this excuse in the future. American policymakers use a variety of practices, such as antidumping laws, to re-strict imports -- often in the name of "fair trade." Such restrictions usually are at the behest of American special interests seeking to restrict their competition. The first and foremost result of these practices is to harm American consumers. If the United States simply eliminated all tariffs and quantitative restrictions on imports, the net welfare gain to consumers would be $15.49 billion a year, according to a 1995 U.S. International Trade Commission report.2 (See Table 1.) That is probably a conservative estimate. Economists Gary Clyde Hufbauer and Kimberly Ann Elliot placed the total costs of protectionism in 1990 at $70 billion.3 American consumers, families, and particularly businesses that rely on imports as raw materials or components for production would benefit significantly if the United States unilaterally removed all import restrictions. America's protectionist policies also make it more difficult to maintain and expand freedom to trade worldwide. Policymakers in other countries understand that America's holier-than-thou trade rhetoric rings hollow. If America wishes freer trade, it would do well to start by dismantling its own barriers to trade and ceasing its own unfair trade practices.

It Starts with Consumers American government officials often complain about trade restrictions imposed by other countries. One reason is that, generally speaking, America is among the world's least protectionist nations. In some ways that distinction is akin to being among the most righteous men at the local brothel. Despite America's less protectionist track record, its policies remain far from pure. The U.S. government continues to make numerous interventions in international trade that have no economic basis. Protectionist policies in the late 20th century take forms different from the tariffs that traditionally were the restriction of choice. And politicians gain political support by favoring a particular industry while the nation's consumers lose out. But while other nations may harm the welfare of their own people through protectionist trade policies, that is no argument for inflicting damage on the well-being of Americans by limiting foreign companies' access to the American market. The list of products with U.S. import restrictions includes meat, footwear, frozen fruit juices, and many other items, most of which have well-funded lobbies. The literature on textile and apparel import restraints alone is voluminous. Table 1 shows how the economic welfare of U.S. citizens would change if all import restrictions on foreign-made products were removed. The calculations take into account the fact that some workers in particular industries would have to change jobs. But that should not be viewed any differently than a restaurant laying off workers because another, more popular,...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Protectionist Policies Essay
  • Are Protectionist Policies Beneficiak to Business? Essay
  • Essay on Domestic and Global Protectionist Policies Affecting Economies
  • Discuss the effects of protectionist policies on the global economy Essay
  • America's Policy on the Vietnam War Essay
  • Trade Policy Essay
  • The Hand Essay
  • America's Energy Policy Essay

Become a StudyMode Member

Sign Up - It's Free