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Free Trade for All


Free Trade for All

Massachusetts Governor William Weld, running in a tight Senate race against Senator John Kerry, recently came out in favor of a protectionist trade ban against Burma (aka Myanmar). Weld argued that Myanmar was guilty of human rights and environmental crimes and clearly felt this position demonstrated his commitment to ethics over economics, as a way of opposing "Burma's tyrannical regime." But was he right? This question is important since the economic arguments for protectionism have been roundly discredited. Trade sanctions, after all, hurt people -- not nation states. Without the moral legitimacy conveyed by the Governor Welds of the world, protectionism would wither away. Thus the legitimacy of moral protectionism deserves careful scrutiny.

Certainly, trade restrictions justified on moral grounds are multiplying. On the right, the Helms-Burton law seeks to prevent foreign companies from dealing with Cuba. On the left, efforts to "Green" GATT, to extend NAFTA-style environmental restraints to world trade, continue. Indeed, in December in Singapore, the WTO will consider whether trade should be subordinated to a wide variety of environmental and labor policy objectives, whether trade agreements should be subject to vetoes by the Sierra Club, the AFL-CIO or other special interests. Protectionist policies already benefit powerful domestic economic interests; this new moral element only strengthens the political power of anti-trade forces.

Tragically, trade remains one of the least respected of all economic activities. Production involves work -- "the sweat of the brow" -- but trade is seen as just moving goods and services around. The virtues of trade are unappreciated. Yet only trade can harness the self-interest of strangers to create wealth around the world. To restrict economic exchanges to those sharing one's values, is to endanger trade and thus to threaten civilization. Still, trade remains vulnerable to political demagoguery, especially when the trading partners are foreign. Indeed, the very baseline norm of trade policy, the "most favored nation" (MFN) status, is inherently protectionist.

Under the MFN concept, trade is viewed as a privilege granted by one state to another, rather than as a basic freedom allowing the individuals of one nation to engage in mutually beneficial exchanges with the citizens of another.

Do trade bans really advance moral causes such as environmental protection or human rights? Wouldn't opening economic doors better advance moral concerns? On environmental grounds, the data shows that wealthier is healthier and richer is cleaner -- and trade advances both these results. The human rights issue is perhaps less clear cut, but would the Soviet Union have collapsed as quickly had America restricted the flow of computers, copiers, and fax machines?

Trade allows the people of the world to experience the benefits of economic and individual liberty, and thus creates pressures for further liberalization. Trade does not ensure a free society, but it does encourage it. To block trade is to block the first steps toward a better world. Moral protectionism may please domestic interest groups; it will do little to help the oppressed of the world.

--Fred L. Smith