Trade to recover

Our view: Protectionism won't solve economic problems

efforts to promote free, fair trade and better regulation of world markets could usher in a comeback

March 13, 2009

Many Americans struggling through the current recession would be happy to endorse the "Buy America" provision in the recently passed stimulus bill. Clothing made in China, cars produced in Japan and store shelves stocked with imports provoke disgruntled complaints about lower-paid foreign workers. But our protective instincts are largely misguided. This country is too closely tied to the global economy to dig itself out of the current trouble without helping our trading partners recover too.

Still, only 35 percent of the public thinks trade agreements have been good for the country, a recent survey shows. And 48 percent believe agreements are bad, the highest share in several years. For politicians, playing to such sentiment can be appealing. President Barack Obama recently expressed doubts about proposed trade pacts with Columbia, South Korea and Panama that would clearly be advantageous to the United States

But protectionism here would only lead to protectionism abroad and ultimately to destructive trade wars certain to turn this deep recession into a long global depression. The ugly effects of the global trade wars of the 1930s are proof of that. If there are inequities favoring America's trading partners, they should be firmly challenged, but not at the cost of robust global commerce. In Maryland, the benefits of such trade are apparent. In 2008, the state's international exports grew 27 percent to a record $11.4 billion despite the budding recession. And more than 100,000 Maryland workers are employed by foreign-owned firms.

When the leaders of the world's 20 largest economies meet in London early next month, the American delegation should work to improve regulation of the global banking system and financial markets and increase government stimulus efforts in Europe and elsewhere. America should take the lead in working to produce coordinated policies on these issues and to help the world's poorest nations cope with the devastating consequences of the current decline. That would help produce the renewed confidence needed for a global recovery.

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