Learn Chinese online - Protectionism - the real threat to growth, stability

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BIZCHINA / Weekly Roundup

Protectionism - the real threat to growth, stability

By John Rutledge (China Daily)
Updated: 2007-08-03 13:54

By the end of this year, China will most likely be the United States'
second largest trading partner. Over the past six years, total trade
between the two countries has soared, growing from $116 billion in 2000
to almost $343 billion in 2006. That's an average growth rate of almost
20 percent a year.

This marvelous growth has led to more affordable goods, higher
productivity, strong job growth, and a higher standard of living for both
countries. These economic benefits were made possible in large part
because both China and the United States embraced freer trade.

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As economists, we understand the vital and beneficial role that free
trade plays in the world economy. Conversely, we believe that barriers to
free trade destroy wealth and benefit no one in the long run. Because of
these fundamental economic principles, we sign this letter to advise
Congress against imposing retaliatory trade measures against China.

There is no foundation in economics that supports punitive tariffs. China
currently supplies American consumers with inexpensive goods and
low-interest rate loans.

Retaliatory tariffs on China are tantamount to taxing ourselves as a
punishment. Worse, such a move will likely encourage China to impose its
own tariffs, increasing the possibility of a futile and harmful trade
war. American consumers and businesses would pay the price for this
senseless war through higher prices, worse jobs, and reduced economic
growth.

We urge Congress to discard any plans for increased protectionism, and
instead urge lawmakers to work towards fostering stronger global economic
ties through free trade.

The petition, signed by 1,028 economists, was published in Wall Street
Journal on Wednesday

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