Peter Hoskin

Last stand against protectionism?

Last stand against protectionism?
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Irwin Stelzer writes a great piece in today's Telegraph, characterising Gordon Brown and George Bush as united by their strident belief in free trade:

"Both have a relaxed attitude towards the free movement of people, and are therefore reluctant to prevent immigrants from joining their nations' workforces.

Both resist efforts to raise barriers to the free flow of goods into their countries, with an occasional politically necessitated lapse on Bush's part. And both favour the free flow of capital and welcome the investment of sovereign wealth funds in their nations' financial and other institutions.

The British Prime Minister and the American President might be the last two men standing in the fight against protectionism. Unless you count Tony Blair and John McCain, which you probably shouldn't, since Blair is otherwise engaged, and McCain has a long way to go before he sits in the Oval Office where he can affect trade policy.

All three pillars of free trade - free movement of people, goods, and capital - are under assault, or soon will be.

Start with people. In America, conservatives are outraged that the President (and McCain) won't build a fence to keep Mexicans out, and deport the 11, or 13, or 20 million illegally working at the country's most menial and back-breaking jobs.

In Britain, Brown has been criticised for adopting a policy that has turned over hundreds of thousands of new jobs to Polish and other immigrants who prefer pay cheques to disability benefits.

Then there are imports of goods. Britain has forfeited control over its trade policy to the EU - creating the delicious irony of Peter Mandelson being in charge of a policy area that in an earlier day would have been controlled by his least-ardent fan, Gordon Brown. Mandelson now finds it necessary to accommodate French and Italian pressure to stem the flow of imports from China.

And in America, all of the Democrat candidates have responded to trade union pressure and unease among many voters about the "hollowing out" of American industry, by promising to take a dim view of new trade-opening agreements.

Indeed, Hillary Clinton has even called for re-examination of the North Atlantic Free Trade Agreement (Nafta), a measure of which her husband, now clearly slated to be co-president in a Hillary Clinton administration, is inordinately proud.

Then there is capital. Brown says Britain welcomes foreign investment and is open for business. Bush says he is glad to see America's money coming home and welcomes the investment of sovereign wealth funds in America's hard-pressed banks. So far, so good for the free traders. But neither man will be able to hold to that position for very long." The whole article is well worth reading.  

It's a nasty thought for Brown that one of the planks he most frequently stands on - the advocation of free trade - is being slowly dragged from under him by external forces.  The question is of how he'll react - will he cling onto the free trade plank? Or will he let it go?  I suspect he doesn't have enough political capital to do the former - especially with Bush leaving the White House - so, sadly, it may have to be the latter.