Not Filling the Free Trade Quota

The U.S. government has imposed quotas on some categories of Chinese textiles, and it’s threatened to impose more in October, after failing to reach an agreement with the Chinese government to limit imports. Good economic policy seems to be taking a backseat to the political influence of the American textile industry. Similar actions by the EU have already begun to hurt European retailers and manufacturers. The editors of the New York Times are exactly right:

This isn’t the way free trade is supposed to work. For all the talk on both sides of the Atlantic about the benefits of a global market unfettered by protectionism, the wealthy developed countries seem to want free trade only when it benefits their chosen big corporations. Meanwhile, poor consumers suffer the most. The Progressive Policy Institute, a research group in Washington, estimates that shoes and clothing – particularly cheap shoes and cheap clothes – have far higher import duties, relatively speaking, than most other products.

None of this politically expedient protectionism will change a single thing about the way the future is shaping up. Trade experts are unanimous in their belief that China, with its huge modern factories and inexhaustible pool of cheap labor, will continue to dominate the world market for mass-market textiles and apparel. Instead of trying to fight the inevitable, policy leaders in America and Europe should be focusing on developing industries in which their countries can remain competitive and on retraining the textile workers whose jobs migrate. Punishing lower-income consumers in the name of protecting jobs in a dying industry is not the way to go.

Post a Comment

Your email is never shared. Required fields are marked *

*
*