The protectionist myth

With tens of thousands of protesters expected in Seattle in opposition to the World Trade Organization meeting there, protectionism appears to be on the rise. And the Seattle-bound activists aren't alone. Korean students march in Seoul, urging their compatriots to buy only national goods. French farmers trash a McDonald's to protest the globalization of their dining experience. And British and Indian activists destroy fields of bioengineered crops and press for bans on the importation of genetically modified organisms (GMOs).

It is little wonder that free-traders such as Federal Reserve Chairman Alan Greenspan loudly lament a new wave of old-fashioned protectionism that imperils the hard-won gains of market liberalization and threatens ruinous trade wars.

These concerns miss the point. It's true that environmentalists wish to protect biodiversity, consumers fear genetically modified foods, and unions are concerned about child labor and poor working conditions. But efforts to use trade sanctions to enforce labor, environmental, and health standards only confirm that trade now touches more lives in more ways. The fact that environmentalists worry whether shrimp traps in developing countries inadvertently kill sea turtles isn't a sign of rising protectionism. Rather, it underscores the emergence of a global market for shrimp caught by developing countries. The "new" protectionism reflects the success of economic globalization, not the failure.

Indeed, free trade is hardly in retreat. Tariffs are declining and trade is expanding almost everywhere. Export restraints and nontariff barriers are disappearing. Even with the contraction of many Asian economies and the slowdown in world growth, the volume of global trade grew by 3.6 percent in 1998 and is expected to expand by 3.7 percent this year. Overall, merchandise trade accounted for 37 percent of global economic activity in 1998, up from 27 percent in 1980. On the whole, trade has never been freer.

Unfortunately, rising anxiety about the fate of free trade often confuses new forms of protectionism with the older variety, which sought to protect narrow economic interests of one industry at the expense of another. Insistence that the new battles are just an extension of the old war reflects free traders' denial of the growing complexity of the global economy they've helped create.

New economic opportunities create new vulnerabilities. If advocates of free trade want the benefits of a global market economy, they must accept the complications that come with it. Whether environmental, labor, or consumer concerns evolve into full-blown protectionism depends on whether free traders are willing to engage these concerns in a meaningful way. If protests concerning child labor and GMOs are simply dismissed as thinly veiled efforts to safeguard domestic producers, public frustration with globalization will only grow.

By incorrectly sounding the alarm about a looming protectionist menace, free-traders pose a real danger to open markets because they risk inhibiting trade negotiators and elected leaders from seeking further liberalization. The forgone benefits of continued opening would surpass current economic threats from renewed protectionism.

The alleged evidence of protectionist fervor and the Seattle demonstrations are merely warning signs. They remind us that benefits of international commerce aren't yet fully shared, costs aren't sufficiently compensated, and the environmental impact of trade has yet to be fully considered. If these problems aren't addressed, true protectionism could indeed return with a vengeance in the first years of the new millennium, and with devastating consequences. But the world wouldn't have wild-eyed economic nationalists to blame. The villains would be short-sighted free-traders who chose to fret about nonexistent protectionism today, rather than head off the true threat tomorrow.

* Bruce Stokes is a columnist for the National Journal, in Washington, and a senior fellow at the New York-based Council on Foreign Relations. This essay is adapted from his forthcoming article in Foreign Policy magazine.

(c) Copyright 1999. The Christian Science Publishing Society

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