Protectionism is an economic policy adopted by countries that wish to restrain harmful trade through measures such as tariffs, quotas and various regulations. Protectionist methods are often used when a country wishes to stem the flow of dangerous imports or to protect domestic industries.

As a result, protectionism is often viewed as a barrier to free trade. The word itself seems to invoke fear into liberty-minded individuals who regard protectionism as merely a tool used by governments to manipulate the market through isolationism and subsidization. This mindset must be reversed if the U.S. intends to restore economic stability.

Opposite of protectionism is deregulation. Deregulation attempts to separate economic activity from the laws of the state. The general thinking behind free trade is that competition will automatically ensure the most efficient allocation of resources exists, which in the long run will benefit everyone. The problem with the WTO and the GATT, organizations which seek to spread and enforce “free” trade policies, is that in actuality they are deliberate extenders of specified protectionist policies parading under the guise of free trade.

Deregulation, extended by the WTO and “free” trade enthusiasts, inherently and deliberately aids specific countries, industries and companies often to the detriment of individual enterprise. The United States is a constant victim of the WTO’s trade policies. The WTO often rules against the U.S. and other countries that practice “protectionist” policies. Often the laws the WTO supersedes exist in order to broaden environmental rules, health and educational services, protect from toxic imports, etc. The policies of the WTO repeatedly favor large international corporations while ignoring the voice of the people and their governments. For example, the following list shows exactly how dangerous the WTO is:
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• Countries cannot say no to genetically engineered food.
• Countries must accept milk that contains genetically engineered growth hormones known to cause health problems.
• Guatemala took efforts to help reduce infant mortality, in accordance with the World Health Organization’s guidelines, by countering aggressive baby food companies’ marketing tactics that aimed to convince mothers their products were superior to the more nutritious and disease-protecting breast milk for their babies. The result? The affected corporations managed to take this to GATT (the predecessor to the WTO) and get a reversal of the law amidst the threat of sanctions. Profits prevailed.
• Canada submitted complaints to the WTO regarding France’s ban on asbestos imports. The WTO did uphold the ban, but the case highlights the nature of the WTO: it is only an auxiliary between corporations, willing to hear even a case against asbestos. France should never have to justify banning such a harmful product. Talk about waste. The asbestos industry in Quebec, which accounts for the employment of 2,500 workers, is valued at $224 million.

• The United States’ attempted to ban shrimp caught using apparatuses that were harmful to endangered sea turtles but the WTO ruled this ban was illegal, forcing the U.S. to reverse its decision.
• China’s successful appeal to the WTO regarding Chinese poultry has forcibly opened up U.S. markets to the Chinese poultry industry, which is full of deception, lax regulations and unsanitary conditions.

The list goes on and on.

As a natural friend to corporate globalization, “free” trade stifles domestic industries as multinational corporations gain access to worldwide production resources (including labor).
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[The] moving of money through an economy is why there is so much wealth in a high-wage manufacturing and exporting country and so little within a low-wage country that is “dependent” on imports. With centuries of mercantilist experience, developed societies understand this well.
J.W. Smith, The World’s Wasted Wealth 2, (Institute for Economic Democracy, 1994), p. 66

The United States’ trade deficit for 2010 currently stands at $293 billion; our balance of trade has not been positive since 1975. If J.W. Smith’s perceptions are accurate, the United States has been shifting its wealth for over 30 years. This transfer of wealth is easily recognized upon examination of foreign-owned U.S. debt, our national debt, and the overall trade deficit. As our wealth deteriorated over the past three decades it was the middle class that received the biggest blow. For decades the middle class has experienced what has been coined “median wage stagnation;” real middle class incomes have remained more or less constant for 37 years. The correlation between our trade deficit and middle class wage stagnation is certainly direct. As the United States continues to outsource and offshore its manufacturing base, middle class jobs and incomes decline. The only winners are the multinationals.
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Some backdoor protectionist tools utilized by countries like China and international corporations include:
• Forcing technology transfers and manipulating their currency
• Providing vast subsidies to local industries through the value-added tax which acts as a hidden tariff
• NAFTA, CAFTA and other one-sided trade agreements favor only large corporations and certain industries

“Free” trade, as practiced by the WTO, is neither free nor fair. It can only be fair and free if nations stop utilizing protectionism for some of their industries, while hypocritically requiring (sometimes forcing) other nations to forgo these same policies. It is through this backdoor protectionism that China has been able to tip the balance of trade largely in its favor. The United States cannot and should not suffer such unfair policies. The middle class that made America great is dying, and if Americans don’t take action soon, it will be too late.

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