I’ve been nattering on for quite a while about the threat of protectionism. My latest screed was on February 1, where I noted that the porky pig bill included an extension of the Buy American Act to foreign steel used in ’stimulus’ projects. This dumb move has managed to enrage most of the world, which seems to remember better than Congress both the Smoot-Hawley Tariff Act and its role in turning a garden-variety recession into the Great Depression.
Well, the EU just boxed Hope ‘n Change’s ears. From the Times of London:
The European Union warned the US yesterday against plunging the world into depression by adopting a planned “Buy American” policy, intensifying fears of a trade war.
The EU threatened to retaliate if the US Congress went ahead with sweeping measures in its $800 billion (£554 billion) stimulus plan to restrict spending to American goods and services.
Gordon Brown was caught in the crossfire as John Bruton, the EU Ambassador to Washington, said that “history has shown us” where the closing of markets leads — a clear reference to the Depression of the 1930s, triggered by US protectionist laws.
And Hope ‘n Change is hearing the message, loud and clear.
“I agree that we can’t send a protectionist message,” he said in an interview with Fox TV. “I want to see what kind of language we can work on this issue. I think it would be a mistake, though, at a time when worldwide trade is declining, for us to start sending a message that somehow we’re just looking after ourselves and not concerned with world trade.”
But he still has to deal with his buddies in Congress – and the labor unions. And I seriously doubt they will care what the EU says – or the Canadians, who are quite upset by Congressional threats to ban U.S. sales of petroleum extracted from Alberta’s oil sands.
