Retreating from free trade has a damaging history – but it’s a mistake world leaders are set to repeat

Protectionism brings short-term benefit, but long-term harm – nations like the UK, US and China need to realise that, writes Vince Cable

Tuesday 12 October 2021 21:48
comments
<p>‘The Biden administration shows no interest in restoring the US leadership role over trade’ </p>

‘The Biden administration shows no interest in restoring the US leadership role over trade’

There aren’t many American politicians, other than ex-presidents and Alexander Hamilton, who could claim global name recognition generations after their terms of office.

Senator Reed Smoot and Representative Willis Hawley, however, became infamous through their 1930 legislation – the Smoot–Hawley Tariff Act – raising US tariffs. Their legacy, of tariffs on 20,000 imported products, made a substantial contribution to the economic devastation of the Great Depression and to the bout of retaliatory trade warfare which helped fuel the drive to actual war. Almost a century later, their protectionist agenda is enjoying a revival.

Until the middle of the last decade, it all looked so hopeful. More than 60 years of sustained post-war reduction in trade barriers had contributed generously to prosperity: not just in the rich western world but pulling hundreds of millions, especially in Asia, out of poverty. A rules-based system evolved, centred on the General Agreement on Tariffs and Trade (GATT), then on the World Trade Organisation (WTO). It led to the removal of most tariffs and quotas, and substantial liberalisation of economies almost everywhere.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

View comments