Thursday, August 10, 2017

The Danger of Trade Restrictions in Our Time

 International trade has been crucial to the stability of the planet since World War 2.  GATT, the predecessor of the World Trade Organization, was created in 1947 to reduce trade barriers.  It was a great blow to nationalism because it made borders more transparent.  Many people feared a third world war throughout the late 20th century, but it never happened because countries depended on each other more and more for their economic stability. 

Now the lesson is being lost.  The USA, once a leader of the free world, is run by a man who wants to re-negotiate all our former trade deals on terms that would only benefit his own country.  The USA makes so many products the world needs that he has taken for granted the fact that we need trade from other countries as much as they do from us.  Petroleum, telecommunications, apparel & footwear, pharmaceuticals, and automobiles are all major products that we import.  It's enough to remind us that we import far more than we export, so if we start taking a USA first mentality, we run the risk of upsetting our allies, economically as well as politically. 

A country like North Korea, who has been notoriously militant lately, could do well by opening their borders to trade.  Totalitarian states tend to be militant because they don't rely on outside resources, only their own.  They always fail because they fall behind the rest of civilization's collective progress.  How many people know that the Internet in North Korea is largely non-existent?  That certainly can't be good for business.  North Korea will fail.  If it already knows this, perhaps all these idle threats are cries for help in disguise, masked as tough diplomacy. 

What may be most alarming is we have a president who is every bit as nationalistic as North Korea's leader, who's willing to threaten nuclear war against one of the few countries that would actually be crazy enough to fire first.  War profiteering has "trumped" free trade in the past.  I would not be surprised if it happens with him in office. 

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