Friday, January 30, 2009

WTO warns of bailout dangers - National Post

Yet another unintended consequence of bailout fever - the World Trade Organization is warning about trade wars. In fact - numerous countries have already begun putting up walls to trade, tarrifs and the like.

3 comments:

Mike said...

Argentina, Ecuador, etc. are erecting trade barriers on imports? I'm sure glad I don't live there.

Eurozone is subsidizing dairy exports? Let me live in a place where I can buy subsidized products!

Louis Paquette said...

Hey Mike,

I believe the main point here is that protectionism is thought to have caused the Great Depression to get far worse - it's exactly the wrong thing to inspire right now. Along with all the other moral and economic hazards, it's yet another negative unintended consequense of bailouts.

Now since this article was posted, it appears Americans want to pull back on the hostile language. Thank goodness Obama seems capable of acknowledging when he screws up.;-)

Mike said...

I'm with ya, Louis. Protectionist policies prolonged the Great Depression.

There is a belief that we are harmed when our industries are undercut by price via foreign subsidies. I understand that. But would argue that while it may be bad for a particular industry, the 'unfair' competition benefits us more than it harms our industry. The losers are the taxpayers in the subsidizing nation.

Protectionism harms the protected. If Europeans want to subsidize dairy exports and car exports, I say, "Send me your milk, your cheese, your Mercedes!"

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