Robert Lighthizer’s protectionist NYT oped was so bad that I don’t mind piling on a week later. Here are two letters from professors of economics.
First, Dartmouth’s Doug Irwin writes:
Robert Lighthizer’s “Grand Old Protectionists” (March 6) is riddled with distortions and errors that one hopes is not representative of all trade lawyers who represent special interests seeking protection. Let’s just take two claims: first, that “free traders . . . . allow no room for practicality, nuance or flexibility. . . even when it means bowing to the whims of anti-American bureaucrats at the World Trade Organization.” The WTO agreements were largely written by the United States, are riddled with exceptions and escape clauses, and there is no evidence that the dispute settlement system is biased. The United States wins just about every case it brings before the body, just as other countries tend to win cases brought against the United States – simply because countries only bother to bring strong cases to the WTO. Second, Lighthizer argues that temporary import protection during the Reagan administration, such as that granted to Harley-Davidson, “worked.” In fact, Japanese firms already produced heavyweight motorcycles like Harley’s in the United States. And the import quota on 700cc and above motorcycles was completely evaded by Japanese exporters when they started producing a 699cc version that was not affected by the trade restriction. The recovery from the 1981-82 recession, not trade protection, allowed Harley to rebound.
George Mason’s Don Boudreaux writes:
Among Robert Lighthizer’s objections to principled free-traders is their opposition to protectionism “no matter how many jobs are lost” (“Grand Old Protectionists,” March 6).
If Mr. Lighthizer is referring to overall employment, his facts are wrong. Free trade does not reduce net employment. But perhaps he’s talking about specific jobs, such as those lost in Carolina textile mills when Americans buy more textiles from abroad. The argument seems to be that practical statecraft often justifies protecting such jobs even if doing so prevents the creation of other jobs in their place. If this is Mr. Lighthizer’s point, he’s too modest when calling for trade policies that allow for “practicality, nuance or flexibility.” Because technology destroys far more jobs than does trade, Mr. Lighthizer should endorse also a “pragmatic” approach to innovation – empowering government with the flexibly and nuance to block firms’ introduction of efficiency-enhancing production techniques that displace workers. Surely, according to Mr. Lighthizer’s practical logic, we must reject the “dogma” that tolerates “unbridled” improvements in firms’ operating efficiencies.
Donald J. Boudreaux
(This post is the first in a week because I am on holiday. Posting will continue to be light for the next two weeks.)