The Poison of Protectionism

(Peter Hall, Vice-President and Chief Economist, Export Development Canada)

“Never waste a good crisis”. This has recently become the mantra of key policymakers, who are seizing the moment to enact good legislation. Sadly, the crisis has also dredged up discussion of policies that, if applied, would cause great harm. Protectionism is close to the top of that list.

The world has spent the last 30 years – arguably more – freeing up trade. The evidence is manifold. From the GATT round of discussions to the WTO rounds, the Canada-US FTA, NAFTA, EU integration and ongoing accession, implementation and negotiation of other regional trade agreements, to the host of bilateral agreements in place or on the table, the world has bought into freer trade as a means to greater global prosperity – a prosperity that each adherent participates in. To top it off, considerable effort has been devoted to freeing up international investment flows, a critical element of global trade, through a profusion of bilateral double-taxation agreements and investment protection agreements. It doesn’t stop there – many more deals are in the works. Read more here.