The ghosts of Smoot & Hawley


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As we see in  the papers and on the news the economic news does not get much better. I had hoped that the Obama stimulus package would help, but recent press coverage causes me to think otherwise.

Apparently the House of Representatives added a protectionist clause to the Obama stimulus last week which major US exporters fear will lead to retaliatory measures by other countries.

Already the protectionist French are seeking to tie aid to their companies with conditions which surely must be illegal under EU law, but as always the French will ride roughshod over EU provisions.

This is not good news. Here in NZ we depend on the ability to trade freely. All aspects of our economy will be negatively impacted if the world becomes more protectionist.

Tim Groser and others are right to worry.

The noises made at G20 and elsewhere over free trade and Doha are proving to be meaningless.

It would appear that the lessons of history may not have been learned. It would appear that the ghosts of Smoot-Hawley have risen and are now walking abroad in the US and elsewhere peddling their nonsense yet again.

Let us hope that the world does not embarks on trade wars at this time. The effects today would be far worse than in the 1930s. Do politicans not learn from history?

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One response to “The ghosts of Smoot & Hawley

  1. Pingback: Has a trade war been averted or merely postponed? « Some Thoughts - Peter Salmon’s Blog

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