Tuesday, August 30, 2005

Getting A Hammering

The one thing that really annoys me (OK, one of the things) is when free trade is sacrificed at the altar of protectionism and inefficiency. Now, I'm not necessarily an advocate of totally unregulated free trade - pitfalls are too great, and in all economic matters there needs to be some degree of stability.

The recent decision to impound imports from China, however, and the decision of George Bush to ignore a NAFTA ruling regarding levies on Canadian lumber, however, seem to me to have little or no justification. If we are to have a free trade agreement with China, then we can import any of their goods. We don't then use embargos to prop up inefficient and overexpensive items from France, Italy and Spain. If people want their quality, then they can pay for the quality. If they want the item at a cheaper price, then they should have the opportunity to do so.

Free trade isn't an a la carte issue that we can pick or choose. It is about encouraging enterprise, efficiency and innovation. It is about ensuring that choice remains a crucial aspect of our economy. We can lament the decline of the rural bakery all we like - the fact is, if we wanted the bakeries badly enough we'd shop there and make it profitable. The consumer controls the destiny of the business, not the government. And it should stay that way. It might mean making uncomfortable choices. But more often than not protectionism is used as a means of hiding inefficiency and propping up failing industries. If they aren't up to scratch, we should get rid of them.