Monday, September 20, 2010

U.S. Can’t Kick the Protectionist Habit

(The Montreal Gazette)

Economists keep on showing that “protectionism” does the opposite of protecting a whole economy, but powerful interests in the United States keep turning to protective measures of narrow benefit every time they think they can get away with it.

Campaigns to “Make it in America” and “Buy America” cropped up swiftly after the economic meltdown of 2008. Exporters to the U.S. – including Canada, the U.S.’s main trading partner – protested furiously, pointing out that for the economy overall, proliferating protective barriers only exacerbate a downturn, and could even push the world into a full-blown and protracted recession. Cooler heads finally prevailed and a government procurement agreement went a long way to resolving the Buy American problem.

But the U.S. economy is still struggling, especially in the Rust Belt of the Midwest and northeast. And Americans have not given up on protectionism. The latest scheme is the Foreign Manufacturers Legal Accountability Act. It comes as no surprise that the bill is sponsored by a Democrat from Ohio who’s fearful about November’s congressional elections. Read more here.