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The World Bank and WTO have both made public statements calling for an end to economic protections--namely tariffs--which they see as the culprits of the economic downturn. Pascal Lamy, Director-general of the WTO, even went so far as to blame the infamous Smoot-Hawley Tariff for causing the Great Depression in a Newsweek article published on New Year's Eve 2008. The truth of the matter is that trade protection is necessary and--contrary to the assertions of Mr. Lamy and others--most true scholars cannot agree on any one catalyst for the Great Depression.
Trade protection, through tariffs and other regulatory means, would not only build stability into our unstable economy, but it would bring vital revenue to our debtor government which is currently surviving on debt. Import tariffs would be a crucial means of leveling the playing field between producers in the United States and their state-sponsored foreign competition. As it currently stands, there is no reason to produce domestically, as competing with foreign pricing is impossible. A slight tariff would foster growth at home, and if done properly it would not necessarily result in massive price hikes.
Furthermore, by encouraging the growth--or rather "rebirth"---of our forgotten manufacturing base, a system of tariffs would encourage the production of goods for export, thus bringing in yet more revenue. Instead of funding a ridiculous bailout proposal by acquiring more debt obligations, we could impose a tariff on key imports and raise the money ourselves.
When the going gets tough everyone starts looking for a scapegoat, a pariah which they can ostracize as a "villain"- to be avoided. Advocates of "free trade"- look to trade protection as the root cause of all evil in the world. They argue that any move toward tariff protection will only prolong the downturn, completely ignoring the fact that the economic crisis we are now enduring began amid a wave of trade liberalization. Our current global crisis occurred as the barriers that protect and stabilize international and domestic trade progressively weakened over the past decade.
Regulation in financial and banking markets was completely undermined by international encouragement and lobbying efforts by American financiers. manufacturing industries to speak of, totally dependent on foreign imports--which siphon money out of our economy and thus cost much more than their "bargain"- sticker prices.
It is evident that "free trade"- has failed on its promises to stabilize global markets and make goods and services cheaper and more readily available for every consumer. The United States has witnessed economic crises and recessions from 1980-1982, 1990-1991, 2001-2003 and 2007-present, all of this during a time of international trade liberalization.
We know that trade must be managed, and we know that the popular consensus favors "protectionist"- measures. "Protectionism"- does not have to be connected with such a bad connotation; it does not have to be considered an economic evil. "Protection"- simply means that a government looks out for its own, instead of catering to the interests of another country. If every country did this--looked out for its own interests--there would still be plenty of international trade, and there would be no global collapses because every nation would have built in its own measures of stability.
The point to take away from all of this is simple: economic protection might fail to stave off disaster, but the destruction of trade "protections"- is a proven failure. If we know for certain that one model doesn't work in practice, why cling to it instead of using one we know works? The movement toward "free trade"- has destroyed American industries, lead to rampant corruption in the financial sector, and made our nation dependent on others to survive. Instead of perpetuating the overly interconnected system of "free trade"- we are now using in spite of its disastrous track record, this country must alter course to protect itself. We cannot placate the needs of everyone else, now is the time to look out for ourselves for protection and safety.
