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If you point out the protectionist policies of other countries with
proposals to neutralize their protectionist advantage, you are shouted
down as a protectionist. David Brooks, Sebastian Mallaby, Thomas
Friedman won't like you then. But they utter zero words about the
protectionism of those countries. They just say we must sign
documents labeled "free trade agreements"... and never mind actually
reading them.
Robert Samuelson, a WaPo op-ed writer, finally mentions what is going on.
Here's
today quiz. What do the following have in common: (a) Vladimir Putin;
(b) China's currency, the renminbi; (c) the U.S.-Peru trade agreement;
and (d) Hugo Chávez? Answer: They all reflect the "new mercantilism."
... They're adopting policies intended to advance their own economic
and political interests at other countries' expense. As practiced until
the mid-19th century, mercantilism aimed to do just that.
Samuelson singles out China currency manipulation:
The undervalued renminbi is a glaring example. China's leaders have
staked their country's political stability on export-led job creation
driven by an artificially cheap currency that puts competitors --
Mexico, India and other developing countries as well as the United
States and Europe -- at a disadvantage. China's trade surpluses have
swelled. In 2007, the current account -- a broad trade balance -- will
register a $400 billion surplus, about 12 percent of gross domestic
product, says economist Nicholas Lardy of the Peterson Institute.
That's up from $21 billion, or 1.7 percent of GDP, in 2000. As a share
of GDP, China's current account surplus is "triple Japan's level in the
1980s when Japan-bashing was at its peak."
Samuelson trots out the oft-repeated, and unproven bromides.
But he does not say they are true. It is an incremental change in
traditional rhetoric.
Even if free trade benefits most countries, some firms and workers lose from added competition.
His conclusion isn't really a conclusion.
The world economic order depends on a
shared sense that most nations benefit. The more some countries pursue
narrow advantage, the more others will follow suit.
The conclusion should be this. If other countries break the
rules, there must be an equal and opposite reaction.
Neutralization of the advantage created by the cheating, at the very
least. That's what rules are for.
Mr. Samuelson will get his consensus when cheating loses its appeal through neutralization.
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